Covid-19 boosted the world’s already massive upward trajectory of internet and digital services, putting potentially resource guzzling data centres under scrutiny.
Earlier this year, Singapore put a temporary pause on building new data centres to set aside time to decide how to balance the growing business demand for digital services with the country’s environmental sustainability concerns.
In today’s business environment, every company is a technology company. Whether you are a boutique selling handmade leather wallets or a large multinational, digital technologies are fundamental and will have a significant impact on everyone’s bottom line.
The increasing demand for technology and digital services is inevitable and puts an onus on the providers of digital technology and services to find more sustainable models. This means fundamentally changing how we design, manufacture, supply and consume technology.
Doing so calls for us to embrace as-a-service business model that moves the technology industry towards a more circular economy — one that is designed to minimise waste and maximise reuse.
In the IT space, this means technology manufacturers, service providers and data centre providers need to work together to design a system that delivers digital services more sustainably by minimising power usage and overprovisioning, extending product life, and increasing product reuse or recycling.
Businesses looking to maximise cash flow and financial agility have already begun to see the gains of shifting IT spend from capital expenditures (CapEx) to operating expenditures (OpEx) using as-a-service model. And against a backdrop of growing pressure to operate sustainably, these unexpected sustainability benefits make the as-a-service model all the more appealing not only for the technology industry but also for many other sectors.
What Is “As-a-Service”?
The as-a-service model is a radical rethink of traditional commodity-based businesses where companies used to simply provide a product and leave it at that. A more environmentally friendly approach is for vendors to retain ownership of the product, such as the racks and servers that power data centres, throughout their lifecycle. Customers will still be able to use the product as they need to, but will pay for outcomes rather than for the actual product and its maintenance.
With producers maintaining ownership, they are responsible for building products that last, are more material and energy-efficient. They will also be tasked with requisitioning and preparing these products, or their main components, for reuse at the end of their lifecycle.
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In essence, this means the IT assets powering our digital lives will no longer be tied to a cradle-to-grave lifecycle. Instead, they would be the examples of the “cradle-to-cradle” concept where infrastructure products and solutions have their designs and manufacturing processes optimised with a view to have their material resources reusable for their next service life as new products. The design of products and choice of their components must make them more durable and suitable for repairing, reconditioning and reuse, and – ultimately – recycling.
Embracing “cradle-to-cradle” design concepts and thinking will allow firms to go beyond just trying to be less bad for the environment, opening the potential for them to be a positive force instead. At Hewlett Packard Enterprise, we have put our weight behind the “cradle-to-cradle” approach with its principles serving as our guiding beacon as we execute our plan to make our entire portfolio available as a service by 2022.
The Impact on IT Sustainability
Applying as-a-service models to the IT industry can significantly impact sustainability in three main ways.
Firstly, it allows firms to eliminate the need to overprovision. It is exceedingly common for companies to overbuy IT resources to avoid the dreaded scenario of not having enough compute resources to cater to demand. On average, data centres have about a quarter of their compute power underutilised, resulting in unnecessary resource consumption.
Secondly, organisations would no longer have to maintain old IT infrastructure due to cost of ownership. By applying circular economy principles, IT assets can be upgraded to the latest most energy-efficient versions more frequently, freeing firms from the hassle of dealing with the inefficiencies caused by maintaining aging equipment. It is estimated that 65% of the power used in data centres goes towards processing a mere 7% of workloads.
Lastly, investing in the ability to recycle and upcycle IT equipment can have a big impact on the overall sustainability of operations. Over the years, we have made major advances in the ability to extend the service life of retired assets, and have developed new ways to re-manufacture and reuse components for redeployment in a second life.
Through recycling and refurbishing their IT equipment, organisations will earn back the residual value of their assets, help keep electronic waste out of landfills, and contribute to carbon emissions, energy and materials savings.
Companies in the region should proactively plan how they will remove ageing assets securely and sustainably right from the initial phases of putting together their company’s IT infrastructure, as the irresponsible dumping of e-waste can have a profoundly negative impact on the environment and carries liabilities that vary by regulatory environment.
Moving towards the provision of digital services in a more sustainable manner is not just a moral win, it is a win for businesses with measurable gains. Of course, firms cannot go it alone. With the right support from government policies and partnering vendors, we can push to achieve a more circular economy that is better able to meet climate objectives outlined by leading scientific authorities.
In the face of serious climate and environmental challenges, there is great promise in adopting as-a-service business models for the IT sector to meet the digital demands of consumers and businesses in a post-Covid-19 world.
Michele Madonini is the vice president and managing director of Hewlett Packard Enterprise (HPE) Financial Services, APJ
Photo: Unsplash
