Think the green revolution can get your company out of its recessionary sales slump? You might want to think again. Tight IT budgets are hurting eco-friendly technology, too.
If you’re thinking the green revolution will get your company out of its sales slump, you might want to think again.
As the economy stalls and customers pull back on their IT spending, not even the green moniker is helping spur sales, solution providers say.
“Green is not gone, but the economy is making selling everything difficult,” said David Cottingham, director of global professional services at Dimension Data.
Eco-friendly technology, once believed to be the second coming of IT, is instead coming up short as an easy sell for solution providers, mainly due to tight budgets.
“I don’t see a mad rush to go out and buy green products,” said Stuart Crawford, vice president of Business Development at Bulletproof InfoTech, Calgary. “People are stretching out their IT budgets. We are leading our sales with energy-efficient solutions, and it seems to be catching on when it’s a product replacement. But that’s really the only time customers seem to be considering green IT.”
Indeed, the rush to retrofit or build new data centres based on green technology isn’t happening – at least not now. Rather, customers are only spending when they must replace hardware, and even then going green isn’t a major consideration for them.
“Even before the economic downturn, it has been a struggle for most folks to find value in going green,” said Stacy Gardner, vice president of Technical Marketing at Integrated Archive Systems, Palo Alto, California. “You have to show the ROI monetarily, and that was there even before the downturn. Now it’s an absolute. You can equate the savings to power and space savings, but if you can’t put a hard number on it, it’s not going to be the driver of [customers’] decision-making.”
That doesn’t mean companies’ plans to go green have gone by the wayside, however. In a Gartner survey completed in December, 37 percent of U.S. enterprises said the recession had not changed the priority of their green IT projects, while 32 percent said it had decreased their priority and 25 percent said it had increased the priority of green IT projects. The same survey conducted in Europe yielded vastly different results: 67 percent of respondents said the recession had not changed the priority of green IT projects, 15 percent said it had decreased their priority and 10 percent said it had increased their priority.
“The reason such a high proportion [in Europe] are maintaining or increasing their ‘green IT’ projects priority is because many ‘green IT’ projects are low risk and low difficulty with moderate to good cost-saving and cost-avoidance potential,” said Simon Mingay, Gartner analyst.
But price and eco-friendliness are now holding about the same weight with customers when it comes to replacing products, Mingay noted. In the same survey, Gartner asked the question, ‘How important will be the environmental criteria compared to price of the equipment as selection criteria when buying in 2009?’ A mean score of 1 meant that price is more important; a score of 4 meant that price and environmental criteria hold equal importance; and a score of 7 meant that environmental criteria is more important. In the United States, the mean score was 3.94, while in Europe the mean score was 4.02.
“If we take the long-term [view of green IT], we ain’t seen nothing yet. We are just beginning,” Mingay said. “But 2009 is going to see focus on cost-cutting and enterprises won’t need the halo effect of ‘greenness’ to justify it or to sell it.”
And for some, the green moniker actually is a hindrance to sales.
“There is a bit of an assumption that because certain products are green, they are more expensive,” Gardner said. “More than that, though, some green products might not meet the full purpose of what a customer needs. Some products may only be able to provide 90 percent of performance profile, for example.”
While the economic slowdown forces companies to cool their heels, solution providers would do well to come up with ways to demonstrate real savings of green IT, for both the environment and the wallet.
“In most scenarios, ‘green still seems to be more of a bonus to a purchase than the root cause for alternate decision-making,” said David Lover, CTO of Cross, Bloomington, Minn. “What I’m seeing in the field is that ‘green’ seems to only be relevant when the purchasing decision-maker is responsible for the power budget. Traditionally, power—and the subsequent expense to cool that power usage, which tends to cost more than the power itself—was the responsibility of the facilities department. I’m now starting to see power and the cooling getting billed back to the organisations that are using it. That action could change the game for green IT products.”
Gardner agreed. “I don’t think people are forgetting about green IT; it’s just stalled. I think we are actually at the beginning of the bell curve.”