Government Goes Green

Less is really more.

In this case, 'less' translates to the energy consumed by IT equipment. Less power needed for government agency desktops and wireless devices. Less mega-wattage-dependent server farms. Less discarded computers and handhelds ending up in landfills.

And 'more' means more contract sales opportunities for VARs--if they can deliver environmentally friendly IT solutions and services to federal, state and local government customers. Once considered a second or third priority among buyers of agency IT, the ability to save operating costs through green-friendly features is now emerging as a top consideration in the contract-award process, VARs say.

"Political pressures to conserve and save are being demanded by constituents, so increasing IT needs cannot be accommodated now without a green strategy," said Rene LaVigne, president/COO of Apptis Technology Solutions, a Largo, Md.-based solution provider that works with government customers such as the Departments of Defense, State and the National Institutes of Health on these solutions. "IT investments are financial investments. Those decisions are driven by return on investment."

A federal mandate is also driving the demand: The Bush administration issued an executive order in January 2007 that requires agencies to reduce energy up to 30 percent by 2015, with all computers and monitors needing to be Energy Star-approved. (Energy Star-certified desktops save up to 70 percent in energy costs.)

Another driving factor on the federal side is the fact that many contract rewards are now tied to the Electronic Product Environmental Assessment Tool (EPEAT), a widely used system that sets standards for manufacturers when it comes to consumption, according to Input, the Reston, Va.-based government IT market research firm.

Economic realities are also weighing in, as shrinking budgets are forcing federal agency buyers to seek ways to cut energy bills to further reduce costs. Also, improved IT solutions are making it easier to buy into more energy-efficient solutions, such as increased data storage, 'thin client' computers to replace desktops and service-oriented architecture (SOA). Already, high-profile contracts such as SEWP IV, EAGLE and FirstSource are taking up these energy-saving initiatives.

Server consolidation/virtualization is a topic of huge interest now, Input reports, because it allows for several physical servers to be consolidated into a number of virtual ones that operate out of a single box, resulting in improved performance, less energy usage and reduced cooling costs. Round Rock, Texas-based Dell Inc., for example, is partnering with solution providers such as Hinsdale, Ill.-based Hipskind Technology Solutions Group Inc. to provide virtualization solutions that save government customers up to 65 percent in data center energy consumption costs.

"We're seeing existing types of technologies redesigned to consume less energy," said Deniece Peterson, senior analyst for Input, speaking to the reduction of independence on large server facilities. "Or we're seeing more technology solutions that, by their very nature, require agencies to use fewer resources. A thin client device, for example, lasts three to four times longer than a traditional desktop."

Also, agencies are showing more interest in IT solutions that will help them qualify for energy-rebate programs. Insight Investments Corp., an Orange, Calif.-based VAR, has landed contracts with agencies by producing data-storage solutions from vendor-partner Compellent Technologies Inc. that reduce power consumption, floor space and carbon emissions, resulting in significant rebates such as one that Pacific Gas and Electric Co. provides for California customers.

"Once a customer sees the savings, we don't have to use a 'hard sell,'" said Joe Healy, senior vice president of sales for Insight. "Some customers report that they're reducing the number of disk drives required to manage data by 50 to 80 percent, reducing energy consumption more than 90 percent."

Many of these factors are coming into play at state and local government agencies as well, solution providers say.

"A customer's up-front investment for more energy-efficient servers can typically be offset within months by the energy-cost savings," said Lior Blik, CEO of Network Infrastructure Technologies Inc., a New York-based solution provider that has provided virtualization and other energy-saving IT products and services for the Hoboken University Medical Center in Hoboken, N.J.

Next: NComputing

NComputing Inc., a Redwood City, Calif.-based solution provider, is finding local government customers asking for green IT upgrades. Until recently, the topic never came up as a top priority.

One customer, the city of Malden, Mass., now uses the company's virtualization solutions--which allow a regular PC to run up to 30 additional workstations, with models as low as $70 a seat--for hardware and software for its senior center, emergency management facilities and City Council Center.

"Tight budgets and overburdened IT departments are driving government agencies to look for creative means to providing affordable computing access that meets demand," said Stephen Dukker, chairman and CEO of NComputing. "Before, most green IT inquiries have been characterized as a 'nice to have' but not a requirement. Now, more customers are saying it will be a larger factor in choosing technology, and eventually a strict requirement."

It helps when these savings can be pinpointed in dollar amounts. Hewlett-Packard Co. estimates that energy costs now account for 10 percent of the average government IT budget, but could rise to 50 percent within the next several years. With energy-efficient systems, 'smart' cooling, virtualization/consolidation, advanced blade technologies and other techniques, agencies can reduce energy costs by 40 percent, or nearly $2 billion over 10 years, according to HP, Palo Alto, Calif. Data centers are of particular concern, as they account for the most carbon emissions of any aspect of IT. As a result, nearly half of state CIOs plan to reduce the number of data centers over the next five years, according to HP. Those same CIOs are also looking to leverage energy-friendly technologies, such as thermal assessment services and dynamic cooling. HP provides a Dynamic Smart Cooling product that ensures 'just enough' cooling by monitoring every aisle of the data center every hour, and adjusting accordingly, resulting in 20 to 45 percent less consumption.

"Customers can save a significant amount of money on power and cooling, staffing and hardware by adopting energy-efficient technologies and minimizing data center sprawl," said John Frey, chairman of HP's Sustainability Strategies Council. "This investment will not only pay for itself in terms of electricity reduction over time, but will ultimately reduce the carbon footprint of the data center."

Government customers once lagged behind private industry on green IT spending, but are now catching up, according to CDW Corp., the Vernon Hills, Ill.-based solution provider.

In a recent CDW survey, 35 percent of government agencies reported that they've already implemented green IT initiatives, behind the 48 percent reported within private industry. Now, however, one-quarter of those government agencies say they will make green IT purchases within the next two years, which is the same level reported within private industry. CDW's government sales channel subsidiary, CDW Government Inc. (CDW-G), is pursuing this with customers such as the city of Orlando, Fla., where the solution provider has installed $3 million worth of low-energy, high-performance monitors and laptops, and power-efficient LCD screens.

"Energy efficiency has become a 'motherhood' value in IT--more than 90 percent of IT buyers say they care about it," said Mark Gambill, a CDW vice president overseeing CDW-G. "The first step in reducing energy consumption is to know what you're spending."

Some VARs are so committed to this market that they've developed in-house green teams to come up with better environmentally focused product lines. BearingPoint Inc., a McLean, Va.-based solution provider, even maintains a green IT data center lab to explore virtualization and other technologies in a controlled environment, to better serve its federal, state and local customers.

"One area that we see as a future source of innovation is energy-monitoring solutions," said Simon Hernaez, senior manager for management consulting services for BearingPoint's public service practice. "Customers want to monitor energy use across the enterprise, along with the associated costs."

And other VARs now focus on green as their primary brand identity to customers. Canvas Systems, a Norcross, Ga.-based solution provider, has firmly established this niche with sales to school systems and other local/state customers. Thanks to this track record, it recently received a GSA contract to expand into the federal government space. Canvas is seeing government customers' increasing interest for these solutions mirroring that of the general public.

"Americans are waking up and realizing that we have an impact on the environment and a responsibility to future generations," said Mark Metz, co-founder of Canvas. "But when fuel prices are high, it's even easier to convince someone to 'be green' by saving fuel. The government sector is the same. Whether you voted for Al Gore or not, you can now support going green."

Or take a company like Washington, D.C.-based LimeLeap Solutions, which changed its name from Intersoft to better brand its environmentally focused products and services. Today, LimeLeap is highly focused on local government customers. Company president Marco Luzuriaga talks to customers about how his company shuts down 2,000 desktops when not in use to save about $65,000 in electric costs every year, as well as its continuing virtualization and retrofitting efforts--to prove that he walks the walk.

"We want to make sure the IT component isn't overlooked," Luzuriaga said. "So we're working to get the message out that server virtualization reduces disaster-recovery times and allows for quicker scalability--saving on energy and cooling needs."

Next: Three Ways To Expand Sales Via Green IT

THREE WAYS TO EXPAND SALES VIA GREEN IT

1. SELL SAVINGS, NOT GLOBAL-MINDED ALTRUISM.
Sure, going green is good for the environment. But if you want to make sales, you need to push cost savings to agency customers. Annual growth in IT spending will amount to 3.9 percent over the next five years, so agencies will be looking to cut energy costs significantly through power management, virtualization and SOA.

2. PICK THE LOW-HANGING FRUIT.
That would be data-center consolidation and virtualization—two buzzwords that nearly all agency customers are interested in these days.

3. QUANTIFY RESULTS.
The best way to prove that you're saving government customers' money is to track results via metric standards that both you and the customer agree are valuable before the project is launched. Once a high rate of ROI is established, it paves the way for new business—either via an expansion with the customer or by positive word of mouth/marketing to new ones.

SOURCE: INPUT

Next: Recycling Awareness Creates Demand For 'Green' Products

RECYCLING AWARENESS CREATES DEMAND FOR 'GREEN' PRODUCTS

Not all green opportunities in government IT sales are about saving energy, as a number of VARs are getting significant business from another emerging green trend: finding more earth-friendly ways to get rid of old technology equipment. In other words, finding a better place for it than the landfill.

One VAR, Baltimore-based E-Structors Inc., is finding a channel niche in the recycling of old desktops, laptops and mobile devices. Launched in 2003, E-Structors shreds electronic equipment into 1.5-inch pieces—ensuring that all valuable data is irretrievable—and recycles them, resulting in zero waste at a time when the landfill impact of IT products is also emerging as a concern, given that disposed computers contain lead, mercury and other dangerous materials.

E-Structors customers have included the Department of Justice, Department of Defense, the Social Security Administration and many of Maryland's local county governments. E-Structors President Michael Keough compares the computer recycling movement to that of the past generation's paper recycling movement.

"Obsolete computers and electronics are large contributors to the nation's landfills," Keough said. "In the future, there will be a greater demand for products that can be more easily refurbished—unlike today's computers that we must completely destroy to recycle."

—Dennis McCafferty