Digital sustainability: why CIOs and CFOs must get on the same page

Between a global energy crisis and growing pressures for sustainability, businesses are looking for their CIOs and IT leaders to find a path that reduces their carbon footprint without limiting their scope for growth. We spoke to Steen Dalgas, Senior Cloud Economist for Nutanix and Jennifer Huffstetler, Chief Product Sustainability Officer at Intel, about the challenges and what first steps CIOs might take.

Enterprises are growing more concerned about their carbon footprint, but what sort of role does the data centre and the company’s digital infrastructure have on their environmental impact? Is it growing with each new IT investment?

Steen: We’ve recently done a whitepaper with Atlantic Ventures, and their estimate is that the carbon footprint of data centres is much the same as that for airplanes – it’s at that scale. Around two percent of global emissions come from the data centre, and while everyone understands that air transport is a major contributor to CO2 emissions, actually, data centres are right up there.

This isn’t something CIOs are often aware of. They’re focused on their digital imperatives, and they haven’t really thought about CO2.

So, we’re in a situation where things are already going out of control, and we need to take control now?

Steen: Absolutely. What’s more, compliance and regulatory issues are coming into play. You need to understand the drivers behind ESG [Environmental, Social and Governance]. Fund managers have come to realise that companies that take ESG seriously outperform the market, and instead of the financial framework being focused solely around financial results, we have a brand new set of metrics. Investors need those metrics to decide whether they want to invest in companies or not, and that’s putting pressure on government to pass legislation, so that we have standardised ESG metrics to audit against. There’s a mass of new legislation that’s going to change everything.

Now you need to take ESG seriously, and we’re seeing that crystalize in the energy crisis. If energy was ten percent of the data centre’s TCO [Total Cost of Ownership], it’s now around 40 percent, and companies that were not paying attention are coming unstuck. A lot of people think that it’s a short-term issue, but it’s not. Fundamentally, we’re having to restructure our whole energy model on a global basis. What companies need to do right now is use less energy. It’s a business imperative.

The other part of the crisis is around supply. There’s just not enough, and if we have a prolonged spell of cold weather, governments will have to choose between using gas for electricity or for heating, and they will prioritise heating. That creates issues for IT resilience, and a lot of organisations out there don’t have an adequate disaster recovery plan.

Are CFOs more aware of this than CIOs, because they’re more directly involved with operational costs and with investment?

Steen: Yes. When the Institute of Chartered Accountants in England and Wales published their priorities for 2022, the number one priority was sustainability and ESG. When I was looking at CIO lists, it was nowhere. That’s because of the reporting. ESG started off being all about reporting numbers, and that’s why it’s gone to the CFO first. The CFO is all about reducing energy costs and CO2 emissions, but you’ve got IT facing the challenges of having to digitize the business and scale up as well. That’s when you have two contrary agendas.

Can business reconcile these contrary agendas?

Steen: To get control of this whole mess you need visibility into your energy consumption and which parts of the business are using energy and where. To give you some idea of the problem, Nutanix works closely with Flexera, and they provide software with which you can go in and discover a customer’s IT landscape. Their feedback to me is that they typically find 30 percent more IT assets than the customers think they have; shadow IT and infrastructure that they’re not directly managing. You can’t improve something unless you can measure it.

Is that itself problematic?

Steen: Getting clear data on the energy used in a specific rack isn’t easy, and there’s also a problem around buying new IT products and getting accurate information on their energy usage, because manufacturers quote standard figures that might have no relevance to the reality of how they run. A whole bunch of factors can impact efficiency, and this goes wider than just energy.

The water consumption of many modern data centres is nearly as bad as the energy problem, and even some companies that position themselves as leaders in sustainability are having problems delivering figures that match their claims.

CEOs and CFOs are aware of these issues, but are they investing in fixing them? Are CIOs involved enough in the conversation?

Steen: I’m going to highlight some of the problems. In the public sector, it’s very common for energy to sit in the facilities budget. IT isn’t paying the cost – the bill goes to a different part of the organisation – and you’ve got someone driving a lot of the use, but without being involved in paying for it. I wonder how much energy is wasted in the UK and across Europe because of this mismatch.

Also, CIOs are – quite rightly – focused on metrics which they’re renumerated against, and energy doesn’t come into those calculations. CIOs care about costs and resilience and are very risk averse and innovating on technologies which could potentially drive down energy or water use is risky. Hyperconverged infrastructure could significantly lower energy consumption, but CIOs aren’t going to invest in it for that alone. But with these new ESG metrics, that behaviour could take a more positive direction.

How about AI or automation? Could they help?

Steen: Almost certainly, yes. In terms of energy consumption from the data centre, the energy at the rack and the cooling are the two major contributors. How can we lower it? HCI [a highly automated software defined approach to running data centres] typically operates in a much smaller form factor – Atlantic Ventures benchmarked and came out with a figure of 27% less energy for HCI than a conventional three-tier infrastructure. That depends on the specific use case, but there’s a lot of evidence that HCI means even lower energy usage and less physical equipment.

But it’s also the way you manage HCI vs legacy infrastructure that makes a difference. It’s very easy to add new capacity – you can buy just what you need today rather than buy a lot more capacity than you need in order to scale up later. Because you have less over provisioning, you have lower energy costs and lower emissions. Also, with traditional infrastructure, the systems become less efficient over time. That means you run out of capacity sooner and need to go out and buy more hardware. With software automation backed by AI, you can keep ensuring that resources are used efficiently and that you plan capacity optimally.

Essentially, the software-defined approach to running a data centre, that includes HCI and a high level of automation and intelligence, facilities optimal running and maximises the value from both the physical assets and the power you put into them.

Jennifer: We think AI can have a dramatic impact on electricity use. By using AI to analyse electricity use through telemetry information produced by Xeon processors, electricity use can be intelligently controlled. We provide a robust set of telemetry controls in Xeon processors that enable higher level orchestration software - such as the software Fortanix creates - to take that data and make intelligent decisions on when to reduce system power of servers.

So that prolongs the lifecycle of the hardware?

Steen: Yes. What helps even more is that, with HCI, innovation and new features come through the software. You don’t have to upgrade your servers and processors every three to four years; a new software release can bring improvements in performance and new capabilities. That means you can refresh the hardware less often, maybe every five, six or seven years. When emissions from manufacturing can be as high as 50% in some cases, this is an effective way to reduce your emissions

Jennifer: Another component of the hardware lifecycle is creating modular server designs. This allows server components (CPU, memory, storage) that need to be replaced or upgraded to be easily swapped without discarding the entire system, reducing waste and providing climate and carbon benefits. We drive this at scale through organisations like the Open Compute Project (OCP) to be sure these measures get global scale and adoption by data centre operators.

Is there any other technology on the horizon that could help?

Steen: Liquid cooling. Cooling has traditionally been done through air, but air isn’t actually a very good conductor. Water is much better. Liquid cooling has been around a long time, but it’s traditionally only been used in high-performance computing. Now new start-ups are coming up with liquid cooling for the data centre, and they’re claiming up to 90% reduction in cooling costs. What’s more, the heat transferred can be used to heat buildings or water, so

the cooling becomes a source of energy as well. That’s incredible innovation and a great fit for HCI; it works better with our form factor, and there’s potential for incredible benefits. We’re only investigating now but watch this space.

If we think about where we began this conversation, there’s a lot to be concerned about, but organisations have to be willing to embrace innovation, focus on their measurements, build a baseline and everything will flow from that. Find out what your energy usage and water usage look like, and take those metrics to measure your success. That’s the start.

Jennifer: At our recent Intel ON event, we demonstrated a number of liquid cooling solutions from customers and outlined our intent to scale liquid immersion cooling across the compute industry. Much of the effort revolves around standardising liquids to drive volume and reduce cost. The other is validation of hardware components to work reliably in liquid immersion deployments. We feel these two factors will drive scale across the industry. To learn more about sustainable data centres, download this report.