Green IT ranks low as business priority

Asian firms regard green initiatives as lowest priority, where 31 percent have no plans to adopt the technology in next couple of years, ZDNet Asia survey finds.
Written by Eileen Yu, Senior Contributing Editor
Green technologies rank low as an IT priority among organizations in Asia, where being eco-friendly is overshadowed by focus on productivity and cost margins.

Green IT stats
47.9 percent regard green initiatives as "high priority".

25.8 percent regard such efforts are "low priority".

13.2 percent say green not on their company's agenda.

26.6 percent will evaluate green initiatives in next year or two.

21.9 percent say they will implement green projects within a year

20.5 percent will do likewise within six months.

41.2 percent from companies with fewer than 50 employees think green is a high priority.

31 percent have no plans to adopt green IT in next two years.

According to the ZDNet Asia IT Priorities 2010 survey, green initiatives scored the lowest as an IT priority among Asian businesses, where only 47.9 percent of respondents regarded such efforts as a high priority. Another 25.8 percent said green IT was a low priority, while 13 percent revealed that they were considering such initiatives. For 13.2 percent of respondents, green was not even on their company's agenda.

Conducted online in November last year, the ZDNet Asia survey polled 438 IT decision makers across the Asia-Pacific region, including Singapore, India, Malaysia and the Philippines.

The top 10 list of IT priorities was dominated by business issues like increasing productivity, which topped the list with 90.4 percent of respondents highlighting such initiatives as a top priority. Cost savings (89 percent) and improving processes (83.1 percent) ranked second and third, respectively.

However, green IT topped the list as a long-term implementation plan, where 26.6 percent of respondents said they would evaluate the technology in the next 12 to 24 months. Another 21.9 percent of respondents said they planned to carry out green initiatives within the year, while 20.5 percent said they would do likewise within six months.

Regardless, 31 percent said they had no plans at all to adopt green IT in the next couple of years.

Green by definition
That green initiatives ranked so low as an IT priority did not surprise Andrew Milroy, industry direct of ICT group at Frost & Sullivan. He noted that respondents might define green IT differently. For example, efforts to reduce energy consumption at data centers in order to curb operation costs may not be deemed "green" per se, Milroy said in an e-mail interview.

"Virtualization technology can massively reduce the amount of equipment needed in a data center, and hence the amount of energy required. It's being adopted across the region, particularly in Australia, as a way of reducing costs," he said.

In the ZDNet Asia survey, virtualization ranked third when respondents were asked about their interest in IT strategies and technologies. Security enhancement and integrated enterprise-wide information data were the top- and second-most popular technologies respondents were interested in, respectively.

"Virtualization is a key component of any green IT strategy and can be considered to be 'green'. So if you ask organizations about the importance of increasing efficiency, lowering costs and using virtualization to enable this, they would put it at the top of their priorities... [and these] can also be described as green IT," Milroy said.

He noted that larger companies are more likely to know what is meant by green IT and more likely to have large data centers and use virtualization technology. They are also likely to see more significant cost benefits from implementing technologies aimed at making IT more efficient, and these, too, can be dubbed "green IT technologies", he said.

In fact, according to ZDNet Asia's survey, compared with large enterprises, fewer small and midsize businesses (SMBs) saw green as a priority.

Some 41.2 percent of respondents from companies with 50 and below employees, regarded green IT as a high priority. In comparison, 55.7 percent from companies with over 1,000 employees said likewise, while 43.6 percent who agreed were from companies with between 50 and 999 employees.

Wal-Mart approach to SMBs
In its own green IT report last April, Springboard Research also noted a general lack of green IT awareness among SMBs in the Asia-Pacific region, where these enterprises were more focused on hitting growth and profit targets.

While the economy is expected to pick up this year, the research house said large enterprises will still be the region's main adopters of green IT. Jonathan Silber, research manager at Springboard Research, told ZDNet Asia that large corporations will do so primarily with the intention to cut cost and energy consumption.

The analyst said SMBs are expected to start exploring green IT initiatives on their own, but will also be influenced by companies that they serve.

Silber explained in an e-mail: "When you see larger businesses and multinationals start to demand more green initiatives from their supplier bases, then you will start to see more adoption by SMBs as it is in their best interests."

In fact, he suggested that the most effective way to get SMBs on the bandwagon is to have large enterprises demand that their suppliers support green initiatives. He likened the approach to how U.S. retail giant, Wal-Mart, helped drive the adoption of RFID (radio frequency identification) devices by demanding that their suppliers start tagging products with the microchip.

Silber said: "IT vendors have enough challenges selling directly to SMBs--trying to convince them as a group about green IT looks infinitely harder than that. Taking more of a 'Wal-Mart' strategy, where change is driven by the large businesses, would be a more direct and efficient method as it has a more direct effect on the business activities of these suppliers."

Milroy added that green IT adoption among Asian SMBs would be higher when green IT is positioned as a cost-cutting measure for businesses, rather than as a "nice to have" feature.

Asked if green IT adoption is low because its returns are less tangible, Silber acknowledged that the effectiveness of such initiatives is more difficult to measure than other technologies. "But we feel that this is not the main reason for low adoption in Asia," he said.

The analyst explained that there is still low awareness in the region of how green IT can yield financial benefits for enterprises, either through cost savings or its positive impact on the corporate brand.

"Once green IT is directly linked to green '$$$', then you will see adoption start to pick up," Silber said.

Milroy agreed. He noted that if green IT is positioned as an initiative that has cost benefits, it will be adopted, and he believes this will happen to a greater extent in Asia this year.

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