the next wave of sustainable it

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Green IT

Robert R. Harmon, Portland State University

Haluk Demirkan, Arizona State University

IT managers need to move beyond first-wave green IT strategies of energy savings and regulatory compliance to address second-wave corporate sustainability requirements. A new framework offers IT managers a roadmap for the journey.

IT products and services have become ubiq-uitous in developed countries and are rapidly being adopted in emerging economies. As a result, IT has become highly visible in terms

of both its benefits and costs to society. Increas-ingly, IT organizations are embracing the notion of incorporating sustainable business practices into the design and operation of their products and systems.

The primary emphasis on reducing computing-centric energy use in data centers and throughout the organization represents the first wave of sus-tainable IT, often called green IT. The emerging second wave of sustainable IT will be more exter-nally focused and services-oriented, leveraging IT not only to exploit enterprise and customer opportunities but also to address broader soci-etal problems.1 However, defining and navigating through this second wave could be challenging.

The future of sustainable IT will be driven by government regulations, changes in customer

perceptions of corporate responsibility, and new requirements for implementing sustainable so-lutions. Managers will need to respond to these changes by developing roadmaps for exploit-ing sustainable IT in products and services, or-ganizational processes, and marketing so their organizations can be marketplace leaders. Or-ganizations will need to move beyond narrow operational requirements and embrace a more strategic role as key enablers of corporate sustain-ability and social responsibility efforts. Corpo-rate sustainability requires managers to consider environmental (ecological and regulatory), social (ethical and philanthropic), and economic strat-egies while delivering on core IT performance requirements to drive business productivity.2

IT professionals need to understand this evo-lution of sustainable IT. We propose a framework for the strategic migration of green IT from en-ergy cost-based initiatives to a sustainable IT in-novation platform that achieves IT and corporate

The Next Wave of Sustainable IT

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20 IT Pro January/February 2011

Green IT

strategic objectives by maximizing benefits for society at large.

From Green IT to Sustainable ITThe IT industry has traditionally focused on de-veloping and deploying systems and equipment to meet ever-increasing business demands. IT managers have thus focused on processing pow-er and system costs. Little attention was given to green IT issues, which include energy consump-tion, infrastructure, cooling, and space for data centers.

Over the last decade, however, sustainability has emerged as a business megatrend that fun-damentally impacts how businesses compete.3 Business megatrends often result from the con-fluence of powerful forces such as social changes, technological innovation, war, globalization, government regulations, resource constraints, and other factors and events that disrupt markets and business models. Businesses must under-stand the dynamics of the megatrend and adapt to market changes to gain a competitive advantage.

Most business processes depend on IT to create value for customers and other stakeholders, so IT organizations can play a critical role in shaping

how sustainability will transform the business ecosystem. The key questions are: Do managers fully understand sustainability as a strategic issue and how it will impact their organizations and jobs? Do they have the strategic foresight neces-sary to envision sustainable IT as a platform for innovation that creates superior customer value and thus a competitive advantage?

Early on, sustainable IT focused on green IT initiatives that minimize the ecological impact of the development, management, use, and disposal of computing resources.1 Green IT tends to be product-oriented and mostly focused on reduc-ing energy costs and carbon emissions for data centers and desktops (see Table 1). Its initiatives include controlling and reducing computing’s environmental footprint by minimizing the use of hazardous materials, energy, water, and other resources and by reducing waste throughout the value chain.4

Enterprise-scale data centers can account for 25 to 50 percent of corporate energy use, with corresponding energy costs that reached US$10 billion in the US and EU in 2007—costs that are expected to soon double.5 According to Pike Re-search, total data center energy expenditures in

Table 1. Corporate sustainability in green IT.

Environment (ecological) Environment (regulatory)

Social responsibility (ethical and philanthropic) Economic

• Power and workload management

• Thermal load management

• Virtualization

• Grid computing

• Server/client refresh

• Product design

• Green/clean technology

• Modularity

• Low-carbon materials

• Dematerialization

• recycling

• e-waste

• Decommissioning/disposal

• Green data centers

• Data-center infrastructure

• Life-cycle management

• Supply chain

• Teleconferencing

• Cloud computing

• Waste electrical and electronic equipment (Weee)

• restriction of Hazardous Substances directive (roHS)

• registration, evaluation, Authorization, and restriction of Chemical substances (reACH)

• enterprise Unified Process (eUP)

• electronic Product environmental Assessment Tool (ePeAT)

• energy Star

• environmental Protection Agency carbon regulation

• ISO 14000

• Leadership in energy and environmental Design (LeeD) certification

• Green IT Infrastructure Library

• risk management (in terms of noncompliance)

• Industry engagement: The Green Grid (TGG)

• Climate Savers Computing Initiative

• The Uptime Institute

• Open Cirrus Partnership

• Voluntary codes

• nongovernment organizations (nGOs)

• risk management

• Increase business value through cost savings

• reduce energy costs

• reduce staff

• reduce travel costs

• Improve risk management


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the world will have reached $23.3 billion by the end of 2010.6 Furthermore, global purchases of IT goods and services equaled $1.66 trillion in 2009, so it’s easy to see why green computing methods are a high priority.5 As concerns about IT’s impact on the environment have risen, these issues have become limiting factors in determin-ing the feasibility of deploying new IT systems, even though processing power is widely available and affordable.7 High capital costs, excessive en-ergy use, and the resultant impact on the envi-ronment have elevated data-center efficiency to a strategic issue. Data centers are the driving force behind the green IT movement.

Green IT encompasses IT product use over its life cycle as well as the recycling, reuse, and biodegradability of obsolete products.8 But much more effort is required in terms of improving product and service design, rethinking the value chain, reengineering IT processes, and reori-enting IT culture to align IT organizations with corporate social responsibility efforts.8 The first wave is unlikely to dissuade customers, govern-ments, activist nongovernment organizations (NGOs), socially responsible investors, the me-dia, and other stakeholders from demanding that companies commit more resources to mitigate the social consequences of their business activi-ties. Therefore, the emergent second wave needs to move beyond its internal focus on energy use in data centers and IT operations.

Sustainable IT ServicesAs IT shifts from product emphasis to integrat-ed service-science and IT-service orientation, sustainable IT services (SITS) could redefine how value is created. The emergence of service- oriented business models (such as cloud computing

and service-oriented architectures and infra-structures) provides the foundation for using SITS to drive the IT organization’s ability to address corporate sustainability requirements (see Table 2).

Now, IT professionals usually view IT as a set of integrated services that enable and drive corpo-rate strategy rather than just a set of technology components that are necessary to design, deploy, operate, and maintain innovative sustainable IT solutions. SITS strategies seek to optimize the social responsibility of both the organization and its stakeholders to meet the economic, environ-mental, and social responsibility criteria for de-fining corporate sustainability success.

This broader approach to IT’s social respon-sibility will require changes in how value is conceived and delivered to realize competitive advantages at the corporate and societal levels. To integrate IT with global sustainability and so-cial responsibility requirements, sustainable IT will need to focus on strategies that spur innova-tion, create new markets, redefine processes, and drive changes in IT organizations and corporate culture. These changes reflect a shift in custom-er requirements from tangible cost-benefit and legal-compliance requirements of IT as a product to the more intangible benefits of sustainable IT as a service for implementing socially responsible business models.

The emerging emphasis on broader corpo-rate sustainability will likely leave corporate IT groups ill-prepared to deal with the full range of issues they’ll need to address. Furthermore, mis-aligned IT and business strategies should give IT managers pause as they try to navigate through corporate sustainability strategic waters without a full appreciation for the social responsibility

Table 2. Corporate sustainability in sustainable IT services (SITS).

Environment (ecological)Environment (regulatory)

Social responsibility (ethical and philanthropic) Economic

• Sustainable IT innovation platform

• Sustainability-as-a-service applications

• Sustainable organizational culture

• Applications for smart, energy-efficient operations, renewable energy, green supply chain, green manufacturing, and so on

Meet green IT and emerging SITS compliance requirements and standards

Stakeholder engagement: industry associations, nGO collaborations, and user groups

• Primary impact on customer and societal value through innovation

• Innovative services

• Triple-bottom-line reporting

• Integrated sustainable IT reporting



Green IT

dimensions.5 Corporate sustainability is a more mature discipline than the emerging notion of sustainable IT, with decades of research, estab-lished policies, procedures, laws, regulation, and societal expectations. It’s doubtful that many in the IT industry appreciate the full range of op-portunities and risks they face as expectations for IT become more impacted by external stakehold-ers such as customers, shareholders, regulators, and NGOs. These mandates could limit innova-tion, raise costs, and affect competitive advantage across companies, industries, and geographical boundaries.

Developing a Framework for SITSFew companies have developed a sustainable IT strategy that rises to an enterprise level or goes beyond green IT initiatives to focus on social responsibility goals. Although many firms are changing their policies and procedures to mini-mize their environmental footprints, these ef-forts aren’t well organized or integrated with the IT function. They don’t leverage IT to create sustainable solutions that address customer and societal value expectations.

Executives must overcome their concerns about choosing between corporate profits and sustain-ability initiatives. In the short term, the costs for environmental initiatives or legal compliance requirements can raise product and operating costs. However, the lessons from the green IT ex-perience show that such efforts can also signifi-cantly reduce energy costs. Over a longer term, sustainability fosters innovation that changes the competitive landscape in terms of disruptive new technologies, products, services, processes, and business models.

David Lubin and Daniel Esty studied pioneer-ing companies to explore the drivers behind the quality and IT megatrends of the 1980s.3 As the companies migrated from efficiency-based strat-egies to disruptive innovation, Lubin and Esty identified four distinct stages:

• reduce costs,• reengineer products and processes,• transform the core business, and• create new business models.

We used these stages to adapt the IBM Business Value Institute’s corporate social responsibility

value curve9 to start developing our sustainable IT strategy framework (see Table 3).

Implementation ExamplesAlthough there are no clearly defined method-ologies for how an organization should approach the development of a comprehensive sustainable IT program, the Lubin and Esty megatrend on-tology provides a basic structure that’s consistent with emerging literature-based evidence.3 Here, we review the approaches of six public compa-nies recognized as having world-class corpo-rate sustainability programs and sustainable IT strategies.

IntelIntel broadly defines SITS as “encompassing the study and practice of using information and computing technology resources efficiently and effectively in ways that the planet can support indefinitely.”10 Intel’s IT Sustainability Program Office focuses on producing energy-efficient products and services and reducing IT resource consumption and waste. They’ve set sustain-ability goals and developed baseline metrics for reducing waste. Stakeholders are employees, cus-tomers, partners, regulators, communities, and NGOs.

Since 2004, Intel’s sustainable IT initiatives have included

• developing server and client refresh capabili-ties to consolidate servers and implement more energy-efficient client computers;

• using virtual computers; • improving data-center design, efficiency, virtu-

alization, and asset utilization; • adding capabilities to meter data centers; • developing dematerialization techniques and

collaboration technologies; • reducing travel; and • engaging industry, NGOs, and governmental

organizations (such as the Environmental Pro-tection Agency, Energy Star, Climate Savers, the Green Grid, the European Union, and the Bureau of Energy Efficiency-India).

Intel has environmental compliance strategies for the worldwide markets in which it operates. Publicly identified initiatives include the Restric-tion of Hazardous Substances (RoHS) directive;



Registration, Evaluation, Authorization, and Restriction of CHemical (REACH) substances;

Enterprise Unified Process (EUP); and Energy Star.10 Intel’s sustainable IT program is in the early stages of focusing on a wider range of sus-tainable IT issues that directly impact external stakeholders. Social responsibility issues are on the agenda and it appears that the program aims to closely align with Intel’s overall corporate sus-tainability efforts.10

Hewlett-PackardHP’s Global Citizenship across the Enterprise program provides a framework for its sustainable IT initiatives.11 HP develops SITS solutions for internal use and subsequently markets them to customers. Its environmentally sustainable IT initiatives have addressed data-center efficiency, energy-efficient cooling, containerized data- center modules, server virtualization, server den-sity, cloud computing, and data-center building services. HP is a member of the Open Cirrus partnership with Intel and Yahoo and universities

in the US, Germany, and Singapore. Other HP initiatives include printer efficiency, print ser-vices, supply-chain efficiency, IT asset recovery services, virtual meeting systems, power man-agement, less toxic raw materials, and energy-efficient product design. HP complies with the Waste Electrical and Electronic Equipment (WEEE) and Energy Star programs.

HP has a Sustainable IT Ecosystem Lab within HP Labs. The goal is to pioneer technologies and services that will reduce greenhouse gas emis-sions. One project demonstrated the case for in-tegrating IT applications for computing, sensing, and autonomous control technologies with phys-ical infrastructure to improve energy efficiency in a municipal water system. By more efficiently managing water flows, the team estimates poten-tially reducing lifecycle energy by 15 percent.12 This is an example of turning an environmental problem into an opportunity for the application of HP services.

HP supports a wide range of social responsi-bility projects for education, entrepreneurships,

Table 3. Sustainable IT strategy framework. Stages 1 and 2 constitute the first wave—product-oriented green IT. Stages 3 and 4 constitute the second wave—market-focused sustainable IT services.

Stage Megatrend strategy Sustainable IT strategy migration

1

reduce costs, waste, and risks

reduce energy costs and carbon footprints associated with computing operations, especially in data centers.

Comply with regulations, develop standards, and manage risks to minimize environmental impacts.

2

reengineer and redesign products and business functions

Design sustainable IT products using strategies such as cleantech (end-of-pipe) and green tech (new science) solutions and focusing on upgradeability, reuse, dematerialization, recycling, remanufacturing, e-waste minimization and disposal, and cloud-based computing applications.

establish sustainable IT processes for renewable energy, energy-efficient operations, a green supply chain, manufacturing, logistics, and marketing that work collaboratively toward the overall enterprise sustainability goals.

3

Transform the core business and integrate new ideas

engage stakeholders and use IT to build trust-based relationships and favorable perceptions that can result in superior brand power.

Align social responsibility with business objectives to increase stakeholder awareness of company efforts and reinforce social commitment.9

Develop a sustainable organizational culture to increase employee awareness of the issues, opportunities, and actions required for sustainability-based innovation.

4 Develop new business models for disruptive innovation and differentiation

Develop a sustainable IT innovation platform that addresses new market opportunities by creating innovative solutions for generating revenue and profit.

Develop sustainable IT services, which typically are software-as-a-service (SaaS) and mobile-application based and offer energy conservation, remote environmental monitoring, supply chain and data-center efficiency, water conservation, organizational design, environmental management and auditing, business intelligence and data mining, pollution management, and decision support systems.



Green IT

community support, and employee engagement. Sustainable IT is approached primarily from an ecological perspective but is fully integrated into company-wide corporate sustainability efforts. HP is making the transition from a first-wave green IT orientation to the development of high-value service innovations that reinforce its social responsibility reputation and leadership position.

IBMIBM approaches sustainable IT from a total en-terprise corporate sustainability perspective, cre-ating opportunities for developing sustainability solutions as a service. IBM tends to “eat its own dog food” by first developing and using sustain-ability solutions internally before commercializ-ing them as market-based solutions. IBM stresses the dependence of corporate sustainability strat-egies on the ability to leverage information from operations, the supply chain, and customers.13 IBM customers are “partners in sustainability,” along with other stakeholders who help set stan-dards for sustainability. IBM’s sustainable IT ini-tiatives address energy conservation, increase use of renewable energy, and increase supply-chain efficiency.

In 2008, IBM cut company-wide energy usage by 6.1 percent with server consolidation and vir-tualization initiatives. Other initiatives include reducing PFC (perfluorocompound) emissions, increasing the use of environmentally prefer-able substances and materials, managing prod-uct end-of-life, designing for the environment, and researching the environmental and human health dimensions of responsible and sustainable nanotechnology development.14 A more descrip-tive term for IBM would be “sustainable service enterprise.”

Peter Drucker famously referred to treating social responsibility issues as profit opportuni-ties as “taming the dragon.”15 IBM interprets this concept as “strategic philanthropy,” align-ing its philanthropic activities with social issues that support business objectives. The purpose is to increase stakeholder awareness of company efforts and reinforce its social commitment.9

NonIT OrganizationsSeveral nonIT organizations also have initiatives for green and sustainable IT developments.16

KPMG. One example is KPMG, which provides tax, auditing, and advisory services. The orga-nization developed an IT Sustainable Procure-ment Standard, a joint effort between its IT and procurement departments requiring that new IT hardware meet Energy Star and Electronic Prod-uct Environmental Assessment Tool (EPEAT) standards. The procurement standard resulted in energy savings of over a half million kWh for 2009 purchases alone, along with huge reduc-tions on greenhouse gas emissions, water usage, and general materials.16

State Street Bank. This financial services provider established an energy efficiency team to expand its green culture by leveraging and promoting telepresence and videoconferencing on a global scale to reduce the environmental footprint.16

Raytheon. This company manufactures defense systems and defense and commercial electronics. Raytheon’s sustainable IT efforts have evolved beyond simply greening IT operations—such as in the data center, on the desktop, and in print. The company managed to cut IT energy costs by $17.4 million per year, and it empowered IT to find ways to apply technology to manage other business processes, such as the development of a database to track water usage.16

S ustainable IT is developing into a disci-pline that’s focused on the long-term im-portance of IT as a source of market-based

innovative solutions to address societal problems. Increasingly, how companies impact society through their economic, environmental, and so-cial actions defines their risks and opportunities, differentiates their products, and impacts their growth potential. The SITS framework provides a roadmap for IT managers on their new journey.

Sustainability is a megatrend that follows a log-ical progression that organizations can anticipate to develop market-based innovative sustainabil-ity solutions. Organizations will need to demon-strate the long-term return on investments for new sustainable IT solutions. Traditional man-agement metrics (cheaper, faster, and better solu-tions) don’t capture the value of service-oriented sustainable IT solutions for this demonstration.



We need research that addresses the intangibility and perishability of IT services.

References 1. R.R. Harmon et al., “From Green Computing to Sus-

tainable IT: Developing a Sustainable Service Ori-entation,” Proc. 43rd Hawaii Int’l Conf. System Sciences (HICSS 10), IEEE Press, 2010, pp. 1–10.

2. A. McWilliams and D. Siegel, “Corporate Social Responsibility: A Theory of the Firm Perspective,” Academy of Management Rev., vol. 26, no. 1, 2001, pp. 117–127.

3. D.A. Lubin and D.C. Esty, “The Sustainability Imperative: Lessons for Leaders from Previous Game-Changing Megatrends,” Harvard Business Rev., May 2010, pp. 42–50.

4. “The Next Wave of Green IT,” white paper, CFO Re-search Services and Deloitte Touche Tohmatsu, Jan. 2009.

5. W. Forrest, J.M. Kaplan, N. Kindler, “Data Centers: How to Cut Carbon Emissions and Costs,” The McK-insey Quarterly, Winter 2008.

6. “Cloud Computing to Reduce Global Data Center En-ergy Expenditures by 38% in 2020,” Pike Research, Dec. 2010; www.pikeresearch.com/newsroom/cloud-computing-to-reduce-global-data-center-energy-expenditures-by-38-in-2020.

7. D. Wang, “Meeting Green Computing Challenges,” Proc. Int’l Symp. High Density Packaging and Microsystem Integration, IEEE Press, 2007, pp. 1–4.

8. S. Murugesan, “Making IT Green,” IT Professional, Mar./Apr. 2010, pp. 4–5.

9. G. Pohle and J. Hittner, “Attaining Sustainable Growth through Corporate Social Responsibility,” white paper, IBM Inst. for Business Value, 2008.

10. S. Wellsandt and S. Snyder, “Building a Long-Term Strategy for IT Sustainability,” white paper, Intel Information Technology, Apr. 2009.

11. Global Citizenship Customer Report, Hewlett-Packard, 2008; www.hp.com/hpinfo/globalcitizenship/08gcreport/pdf/ EMEA_version.pdf.

12. B.J. Watson et al., “Creating a Sustainable IT Eco-system: Enabling Next-Generation Urban Infra-structures,” Proc. IEEE Int’l Symp. Sustainable Sys-tems and Technology (ISSST 09), IEEE Press, 2009, pp. 1–6.

13. Corporate Responsibility Report, IBM Corp., 2008; www.ibm.com/ibm/responsibility/dwnlds/2007_ CorporateCitizenshipReport.pdf.

14. E.J. Riddleberger and J. Hittner, “Leading a Sustain-able Enterprise: Leveraging Insight and Information

to Act,” white paper, IBM Inst. for Business Value, June 2009.

15. P. Drucker, “The New Meaning of Corporate Social Responsibility,” California Management Rev., vol. 26, no. 2, 1984, pp. 53–62.

16. T. Samson, “The Green IT Stars of 2010,” InfoWorld, 22 Apr. 2010; www.infoworld.com/d/green-it/the-green-it-stars-2010-454.

Robert R. Harmon is a professor of marketing and technology management in the School of Business at Portland State University. His research interests are cloud-based sustainable IT services design, ecological design factors for technology products, and intangible value as a driver of product and service design. Harmon received his PhD in marketing and information systems from Arizona State University. Contact him at [email protected].

Haluk Demirkan is a clinical associate professor of infor-mation systems and a research faculty member of the Cen-ter for Services Leadership at Arizona State University. His main research interests are service science, cloud-based IT services, analytics, and business process engineering for sustainable innovation. Demirkan received his PhD in information systems and operations management from the University of Florida. Contact him at [email protected].

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the next wave of sustainable it

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