The Role of ITAM in Sustainability

Ron Brill:

Hi everyone. I’m Ron Brill, president, chairman of Anglepoint. For those of you who don’t know Anglepoint, we’re a global software asset and cloud asset management firm. And for the last three years we’ve been leading the Gartner Magic Quadrant for our industry.

Outside of Anglepoint. I chair the ISO committee for ITAM Standards. I also participate in the ITAM forum on the board of trustees and vice chair. And I also co-lead the ITAM and FinOps special interest group as part of the FinOps Foundation. Very exciting to be speaking with you all. So, let’s get started.

All right let’s talk about sustainability, a major trend that’s happening it’s going to hit all of us over the next few years in a big way. So, who cares about sustainability. The general term that you may have heard use is ESG, environmental social governance.

Sustainability is kind of part of environmental, also some governance aspects to it. And sustainability is really about a lot of things. One of them being, the major one that’s getting a lot of attention is greenhouse gas emissions. But it’s certainly not limited to that. There’s talk about, wasting water, talking about just waste in general, and then all of other things hurting the environment more generally.

But we are going to focus just on greenhouse gas emissions for now, but just to know the picture is much bigger than that. And there are a lot of drivers for that. It really doesn’t matter if you believe in global warming or not. This is happening. Regulators are asking for this with the CSRD, Corporate Sustainability Reporting Directive, within the EU starting to have requirements starting in 2024, whether it’s the SEC announced requirements for US public companies to report more consistently on what they do in this space.

IFRS and other regulators are asking for this. Investors boards are asking for this. Management is asking for this. There’s been all kinds of surveys showing how. Every year, the percentage of CIOs that consider sustainability to be a top priority increases dramatically from year to year.

There’s some research on that by Gartner and others. So, management and boards and managements are caring about this, and that means CIOs are going to care about this one way or another as well. Consumers and partners care about this. It’s many companies in the tech, Salesforce.com for example, they already require their vendors to have commitments in their contracts around getting to zero carbon emissions and other objectives as well.

Employees are asking for this, right? Particularly with the younger generations. They’re deciding which company they want to work for based on how green that company is. So, this is coming from a number of different ways.

It can be viewed in three scopes. There are upstream activities. So, this is everything that happens before the company does its business whatever that business is, service or manufacturing, whatever it is. So, these are things like the company, procurers, business travels, transportation, employee commute, everything that happens.

Before it gets to the company it’s a scope three. Scope two is the electricity and water and everything that’s being purchased by the company. Scope one is what emissions are being generated by the company assets directly. And then the other part of scope three is downstream, which is what happens after the product, or the service leaves your leaves your company.

And there are different types of emissions. They’re collectively viewed as CO2 equivalent, CO2E because it’s inconvenient to talk about different types of emissions. But this is the general picture and the when you hear about scope one, scope two, scope three you have a better feel for what is being discussed there and how does that impact IT.

IT certainly generates a lot of carbon emissions. We’re going to touch about where those come from. And what’s important to mention here is that the magnitude of the, what IT does, carbon emissions will change from organization to organization.

So, if you’re heavy technology-based organization, take Netflix, for example, right? A hundred percent of their, or nearly a hundred percent of their carbon footprint will be generated by their IT. If you’re a company like FedEx or UPS, right? Probably 99.999% of your carbon footprint is generated by your fleet of airplanes and diesel trucks around the world and so forth.

And it will be a much smaller portion of that. But with whatever IT is within the overall carbon footprint. There’s what is the internal distribution within IT? And this is what Gartner has been saying is a typical organization today. And of course, it varies from organization to organization.

One, one observation here is that outsourced services, which is where things like Cloud and SaaS fall, right now they’re saying in a typical organization that 18%, that is by far the fastest growing element, right? So, if we are looking at this picture, five years from now, I would expect this to be the dominant tower within where carbon footprint is generated as part of IT organizations.

And there’s an ISO standard for this 14001. It’s a management system standard. So just like the 19770-1, it’s based on the Deming Cycle of Continuous Improvement Plan, Do, Check, Act, and it’s a best adopted national standard for sustainability. There, there are three main activities, right?

You need to understand your requirements. What are the organization’s requirements? So it could be your regulatory requirement or your board or your C committed to a, to certain commitments that go above and beyond what the regulatory requirements are, which is sometimes the case.

So actually, I’d say more than often that’s the case. Then you need to look into how you measure IT. How do you measure carbon footprint within IT? And then how do you look into optimizing and reducing that carbon footprint? What I should have mentioned as well that within IT, what tends to generate the carbon emissions is really the IT assets.

If you look at, okay where is the, where are the emissions coming from within IT, it’s really all tied to the assets and the life cycle of the assets. And guess who is the function that looks into IT assets in the, in that lifecycle? It’s ITAM. And ITAM, I believe will have a huge role in being the focal point within IT to drive initiatives related to sustainability.

Again, just because we are the function who looks at the lifecycle of the IT assets, and we could look at IT distance vision of on-prem versus cloud on-prem hardware and software.

Hardware is the most often discussed area of sustainability within ITAM talking about what happens to the hardware, before it gets to the organization, the power consumption within the, during its useful life. And then things that you can do to improve that. You want to have effective terms and conditions in your contracts with your suppliers.

You want to extend the life of the asset. Even if you extend the life of a server or a laptop by one year, it can have a huge impact on the carbon footprint. Many of the recent regulations around right to repair and so forth actually were driven because of sustainability concerns. More than anything else.

And then there’s of course, the whole discussion around the circular economy, right? If you can reuse the equipment, if you can refurbish it, if you can use it for parts or if, or even for raw materials or if you can deny it. All those things really drive down your carbon footprint to able to claim credits for those things.

That’s a huge discussion that’s happening. And of course, eliminating a needed hardware and right-sizing the hardware. Sure, it’s not of respect for what it needs what needs to run on it and so forth. But a lot of discussion hardware. But I would say actually most of the impact IT assets on sustainability is going to be around software and cloud by far.

And I believe we are actually going to see the discussion shifting from a focus on hardware only, like it has been so far to a focus on software and cloud, because that’s where most of the impact is going to be. So, with software, there’s some carbon footprint in developing the software.

The hardware and power requirements are heavily impacted by how efficient that software is. There’s initiatives like the Green Software Foundations and so forth that are looking to promote software development to minimize environmental impact. So, the software will be more efficient or amount less power.

And why is that important? If you look at a typical server and this is just directional, it’s not exact numbers, right? If you look at the typical server, only about 25% of the power consumption is generated by the hardware, plus the operating system that runs on that hardware. The remaining 75% of the power consumption is really driven by the software.

How efficient that software is, what workloads are running on it how well is it architected, sometimes, like a cluster architecture could be more efficient than others and so forth. We’re not going to be able have time to get into this, but 75% of the power consumption actually driven by software, not the hardware.

And so, if you’re missing that piece you’re missing a huge piece here. And of course, everything we do in ITAM to remove shelfware and so forth has a direct impact on the corporate footprint as well. Then of course, cloud in one sense, it’s easy because carbon emissions are, have to be self-reported by the provider and everything we do is part of FinOps, like we’re talking about elimination of are needed right sizing, efficient scheduling, and so forth. All those have a direct impact on earnings reducing cloud consumption. And again, this is even just CIPS is the largest box as we saw within the hybrid infrastructure. And if you assessed it, you can see that this one here is going to be the main way that you’re going to be able to control your carbon emissions.

I attended a Gartner conference last week, the IOCS conference where one of the analysts said that carbon emissions in cloud could be 90% lower, 90, as compared to running those workloads on-prem. For a number of different reasons related to the cloud providers, economies of scale and their ability to drive much higher utilization.

So, if a typical utilization in the data center is 40%, when that servers that are running by being run by AWS and Azure. It’s, 85 plus percent. And a number of other reasons. They’re able to tap renewable energy in a much better way and then do a lot of other things. Again, a lot of opportunity for ITAM to play a leading role within IT and being the focal point for sustainability.

And again, this is an item that’s on the CEO’s agenda, right? And I think it would be a huge missed opportunity for ITAM, if we do not take the leadership on this. Thanks everyone.

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