Green technology emerges as serious business in Gulf

• Text size
•  
•  

Green technology is no more a marketing jargon in the Gulf as it has gained relevance in 2009 helping cut down operating and capital expenditure.

With enterprises facing the brunt of cuts in expenses this year, investments in green technologies took the spotlight. Two years ago, it was more of a marketing tool for technology companies and not top priority for Gulf-based enterprises.

Currently, investments in green technology may not be on top of the IT spend list, but it is definitely a priority.

Emirates Business spoke to the industry to understand this change and the path taken by these organisations. Ed Ansett, Director Emea for HP Critical facilities services, Herbert Radlinger, Head of data centres at IT service provider and part of Tecom, eHosting DataForteHosting DataFort, Peter Hannaford, Vice-President at APC (Schneider Electric) for data centres and alliances, Emea/LAM, gave their insights.

Is the region on par with global markets such as Europe and the United States in investments in green technology?
Ansett: There was nothing happening two years ago but now it is a changed situation. Compared to global standards, cost of energy was cheaper in the Middle East and therefore changes did not happen quickly as in markets such as the US and Europe. Investments are happening and enterprises have realised that investments in data centres save money. The bottom line is profit and saving money. Reducing carbon footprint coincides with cost-cutting efforts. At least 99 per cent of the existing data centres can be upgraded creating green efficiency and energy savings. In the Middle East, this practice varies as the financial model is different.

Radlinger: Investing in green technologies brings about energy efficiency and enterprises are realising this now. Green technology is part of the RFP (request for proposal) process and they want to work with service providers who have experience in green data centres. It has become a prerequisite for getting qualified at least since one year.

Customers have to invest 10 to 20 per cent more to implement green technology within the environment and this is happening.

In IT budgets today investments in "virtualisation" and traditional hardware is same. Enterprises want to get energy efficient and reduce power consumption.

Hannaford: Countries such as Saudi Arabia, Qatar and the UAE have state-of-the- art technology, for example Masdar project in Abu Dhabi and Aramco in Saudi Arabia. These projects will bring the region to the forefront, and discussions are taking place within organisations to make it a reality. It was lipservice earlier but now efficiency is priority among enterprises. It is, therefore, changing the market scenario.

Are enterprises allocating funds specifically for green technologies?
Ansett: It may not form a major part of the IT budget but is associated with saving money and energy. This is not a time to spend money therefore in the data centre area TCO has gained relevance. Operating and capital costs are a concern and therefore in 2009 there is an increasing trend towards investments in green technologies. Enterprises also want to reduce carbon footprint and therefore are actively pursuing green technologies.

Radlinger: Customers were cautious in 2009 especially as initial investments are high in green technologies. But in spite of this customers have opted to invest and use modern technologies in green investments.

Hannaford: The drivers are there in the Middle East and therefore it is no more a marketing concept. Enterprises want to do more with less which is why green investments have taken off. The key countries in the region are investing as they have understood that technology can help save money.

There are data centres as old as six years and form part of the huge capital expenditure. The way data centres were run and designed they were taking a lot of place and energy. Awareness levels are high encouraging customers to invest and putting green technology high on the budget list.

What is the role of governments in the region? Are they encouraging use of green technologies?
Ansett: Government initiatives in Europe and the US have made an impact to some extent but it was also factors such as the price of oil and California energy prices. All these coincided with climate change. Governments funds are relevant to implementing green issues.

Radlinger: Globally, concepts such as green and even virtualisation are not very old and therefore not late to pick up in the region.

Technology majors such as Google and Microsoft investments in data centres are the best examples for Gulf-based organisations. Governments here can make a difference especially in driving home the fact that these investments bring down costs.

In countries such as Bahrain, Oman, Qatar and the UAE, green investments are happening.

Hannaford: In Europe, there is a commitment from the government to reduce carbon emissions at least by 80 per cent by 2015.

All companies here have to report if they use above 6000mw of electricity. In data centres, 30-40 racks of kilowatts of electricity is consumed. The tax system is also integrated as companies get carbon credits and there is carbon trading happening. This invariably reduces operating expenses.

By Nancy Sudheer

© Emirates Business 24/7 2009