When leaders consider the cost of new technology, this is most often in terms of CapEx and OpEx, compared to its perceived gain. OpEx can be harder to estimate, particularly across the whole of one’s estate but the past few years have made one aspect of OpEx that has been thrown into clear view for all businesses: energy cost.
Against a backdrop of exceptionally high energy prices driven by Russia’s invasion of Ukraine, companies in Europe and the UK have been especially hard-hit by rising electricity costs.
At the same time, new technologies like generative AI and spiking demand for critical resources like cloud computing has dramatically driven up power demand, seemingly catapulting firms toward a perfect storm of baked-in cost.
Firms are seeking to reduce energy where they can, not least to lower these costs but also to achieve easy wins when it comes to meeting climate goals. Finance directors or chief finance officers may lay out guidelines for spending on power consumption within a set of parameters, or firms may also have policies on energy, designed to minimize usage, and/or to use renewable energy where appropriate.
Even if these policies are not in place, there may be a wish among staff or customers in your industry sector to “do your bit” to reduce consumption.
ITPro speaks to Sarah Watt, VP Analyst at Gartner to learn more about some of the first steps any business looking to reduce energy consumption for tech.
1. Find your baseline
Before you even begin to consider cutting energy usage, it is important to work out what energy you are using, for what purposes, and which devices, services, or platforms are using that energy. Once you have data you can plan actions, observe their effects, and build an energy strategy.
This is achieved via an energy audit. Some energy usage, such as building services if you rent office space or data center provision will be outside your control. You’ll need to consider if you want to factor this into your planning or leave it out.
An energy audit might give you some very useful immediate actions by identifying redundant legacy equipment, what Watt dubs ‘zombie equipment’. She describes this as “idle, but not adding value to the organization”.
“Energy audits help us to re-examine the operational environment and to challenge operational practices,” Watt adds.
2. Make realistic assumptions
Energy consumption is one of those variables that can change wildly depending on the needs of the moment. There are two key factors that can affect future consumption costs and patterns as opposed to current: energy prices, which are volatile and can be difficult to anticipate, and changes in technology usage driven by organizational priorities.
Watt says Gartner expects energy consumption to rise, driven by both organizational growth and new technology deployment such as AI.
While an energy audit will tell you the current state of play, you’ll need to think about how things might change in the short, medium, and long terms to help with setting out assumptions for what you’d like consumption to look like going forward.
Within this, leaders need to be prepared to accept surprises. In practice, this will require plans to be fluid and for the C-suite at any firm may find success in reconsidering their organization’s approach to energy security. “Gartner’s Sustainable IT Opportunities survey shows that 72% of IT leaders plan to increase their investments in energy security for IT over the next 3 years – to 2026,” Watt tells ITPro.
3. Decide on future monitoring systems
Implementing an energy management and monitoring system can be very helpful. Such systems bring together information from different tech equipment as well as meters and even billing systems, allowing organizations to see detailed information as well as get overviews.
These tend to come in the form of simple Internet of Things (IoT) sensors that track energy consumption on a device-by-device basis, or even a location-by-location scale if your enterprise is spread across multiple sites.
Such systems can use machine learning (ML) to inform analytics and suggest actions, produce dashboards for at-a-glance updates, and issue alerts if pre-defined thresholds are reached. Dashboards informed through this approach can give IT teams regular reports on energy use and demand, so that leaders can get near real-time insights into energy usage.
Data analysis can help identify that zombie equipment that could be hogging energy, point to where energy savings can be made, and issue alerts on system performance. For example, if energy usage spikes either upwards or downwards for no apparent reason it can help pinpoint the workload causing the issue.
Sensors of this kind can also help with planned preventative maintenance, so companies can anticipate energy problems and address them before they become costly or environmentally detrimental. At the larger end of the scale this could save firms, such as those using industrial IoT (IIoT) sensors, a sizeable amount of money in wasted energy.
4. Consider energy provider options
Reducing energy usage through optimization via energy management and monitoring systems can be very useful for controlling expenditure. At contract renewal time, the data gleaned could be helpful in negotiating new deals with existing or new suppliers.
In addition, organizations concerned about their carbon footprints can consider revisiting provider options periodically, as contracts allow, to prioritize those that best meet environmental aims.
There are also ongoing opportunities to incorporate renewable energy sources such as solar into the mix. When considering such options, Watts cautions, “Decisions around power supply and efficiency mechanisms are context specific. The primary thing to consider is investment efficiency.” She gave an example, “Data centers need a significant amount of power, but there is limited land around the site for solar – this money may be better spent on other efficiency-based projects.”
As the tech sector grapples with how energy prices will affect data center costs in the short-to-medium term, some companies are investing in green data centers to cut costs and detach themselves from volatile and dirty energy grids altogether. Others are relocating close to clean energy sources, such as AWS’ nuclear-adjacent data center in Pennsylvania or atNorth’s geothermal data center in Iceland.
Watts added more context in terms of renewable energy, “In some markets renewable energy contracts are available at a similar price point to mixed energy supplies. However, companies may want to invest in onsite renewable energy, although there is a capital spend initially, this does lock in some energy supplies at a known price.”
5. Implement, monitor, refine
As with any business system, ongoing monitoring of what’s in place is important. A well-functioning energy management and monitoring system should help the business identify inefficiencies and replacement or updating needs, and perhaps even take preemptive measures that replace equipment that is functioning but over-consuming by today’s standards.
Similarly, regular reviews of renewable energy options, while they may involve capital expenditure, can result in reduced ongoing costs.
Individual workloads and pieces of hardware across a firm’s tech stack will be considered a must and cost management is increasingly important. Systems for monitoring and managing energy use are much more sophisticated than they have ever been and can provide organizations with detailed metrics, actionable advice, and information to inform key decisions. As renewable energy options evolve, this will only accelerate the pace at which firms can reduce their energy spend.
