INPUT Government Technology Market Blog

Green IT Saves Arizona $1.6 Million

Vendors should take advantage of states' need to save money and protect the environment. By creating solutions that are able to quantify the benefits of green technology, vendors will increase acceptance and the demand of Green IT solutions in state departments.

Arizona, like other states, is facing a unique situation in which they must continue to run the state while limiting cost and harmful pollutants. In Arizona, the use of green IT has prevented 760,773 pounds of carbon dioxide from entering the atmosphere this year. Arizona invested less than $300,000 into a software package used to calculate savings generated from using web conferencing. In less than a year, the state has saved more than $1.6 million. Currently, fourteen Arizona state agencies use web conferencing software and are included in this savings number.

In times of tight budgets and increased sensitivity to the environment, it is imperative that states are able to quantify the impact and benefits of the solutions they are using. States are not only interested in the initial savings and environmental benefits of Green IT, but they would also like to view accurate calculations of energy efficiency and financial benefits in the future. While developing green products, vendors are encouraged to not only produce cost effective green technology, but also create products that are able to report energy usage and behavior. As vendors are able to provide quantitative data of the benefits of green products, states will readily accept Green IT and demand an assortment of green products with the same capabilities.

Growing Green Information and Communications Technologies (ICT) - the Next “Big Things”?

With the steady rise in energy costs and growing political and economic interests in global warming and environmental issues, vendors will see a boost in business opportunities in the information and communications space in the upcoming years. Moreover, there will be a high demand for more technology, such as modeling, analysis, and real-time decision making for managing efficiencies across organizations.

On July 23-25, 2008, the U.S. Department of Health and Human Services (DHHS), Administration for Children and Families (ACF), Office of Family Assistance (OFA), hosted the National Temporary Assistance for Needy Families (TANF) Technology Summit in Washington, D.C. Participants ranged from IT vendors to TANF program managers and information technology managers from 38 states, including Puerto Rico and the Virgin Islands, and over 20 tribes. This year's conference featured several workshop sessions that focused on innovative technology tools, resources, and effective strategies to support TANF professionals in making informed decisions and increasing work participation rates and self sufficiency. One of the workshop sessions examined the hot topic of Green IT as a rapidly growing trend.

During a session on Technology Moving Forward: Green Computing, Dr. Robert F. Brammer, Vice President and Chief Technology Officer (CTO) from Northrop Grumman Information Technology, discussed innovative ideas and information for reducing energy consumption and agency expenses while maintaining worker productivity. As indicated by Dr. Brammer, energy costs have become significant in total IT costs and the increasing level of interest in environmental issues is leading to new markets. Furthermore, regulatory and corporate social responsibility requirements have been embedded into this growing market. Last year, the President issued Executive Order 13423, Strengthening Federal Environmental, Energy, and Transportation Management, mandating energy reduction programs and environmental monitoring systems. Dr. Brammer stated that there will be a lot of new technology developments in the near future, such as modeling, simulation, and control of energy usage in IT management. He also talked about the concept of growing "Green Information and Communications Technologies (ICT)" and how these systems and services can positively affect the environmental impacts of other public and private sector operations. In addition, there will be a strong need for professional services, such as assessment, planning, and developing, and implementing new architectural and operational models to help organizations reduce their environmental impact and make them more environmentally responsible.

According to Dr. Brammer, disposal is still a problem. In 2007, biodegradable electronics, consisting of 160 million PCs and 550 million cell phones were dumped into landfills. In Europe, while there are some directives governing how this equipment is being disposed, such as being shipped to Asia, no action has been taken by the U.S. federal government and very few actions have been taken at the state and local level. With ICT, the procurement, operation and disposal of assets become environmentally "friendly." While biodegradable and non-toxic ICT technology is not necessarily an imminent development, significant investments are being made in green ICT. Furthermore, ICT can have transformational impacts on many public sector services and operations, such as homeland security and public safety; transportation; public health; and construction and markets include the public sector customers at all levels of government, including DOD facilities and Cities. As mentioned by Dr. Brammer, telepresence systems and broadband mobile wireless networks enable more group collaboration, surveillance, information analysis, and efficient use of personnel and vehicles, reducing energy requirements. Northrop Grumman for example, is currently building a large mobile wireless network for the New York City, referred to as Green NYC.

When considering green IT, the first thing that comes to mind for many organizations is data centers. As indicated by Mr. Smith from Citrix Systems Inc., data centers are very inefficient and underutilized and therefore agencies should determine how to become more dynamic when it comes to servers. Systems are costly to maintain and costs encompass provisioning, housing and power consumption. Also, business is tied to the infrastructure and processing power is spreading. Mr. Smith suggested the process of virtualization, which allows organizations to have multiple experiences. This involves the consolidation of systems so that multiple systems can run on a single server. The three types of virtualization include application, server, and desktop. Application virtualization involves taking the application and moving it to the data center and desktop virtualization involves taking the desktop and turning it into a type of appliance, in which multiple desktops run on a single server. Mr. Smith indicated that virtualization results in the centralization of processing power and reduces the hardware "churn." Virtualization is an enabler to green IT. Power consumption, however, is not just in the data centers. In the past, it may have been necessary to run screen saver programs on PCs, but organizations can now implement a built-in power management tool that provides automated sleep/wake-up capabilities that are integrated with applications. This is easy to do and does not require any investments by organizations. It is a matter of putting practices in place and enabling features.

According to both speakers, telecommuting is underutilized; taking cars off the roads is a good thing. As per Mr. Smith, a lot of organizations are now looking into telecommuting, home-sourcing, and/or remote collaboration. GSA for example, is planning to be 50 percent tele-homed by the end of this year. With home-sourcing, a full-time work can work from home and call center routes can be set up to the individual's home where calls can be answered remotely.

Green ICT impacts how companies design their products and run their operations. Many companies are now coming together to build environment standards. Dr. Brammer indicated that green IT cannot be dealt with in a "vacuum," but nonetheless, information systems are needed in order to run business and therefore organizations should consider the trade-offs and security issues. For example, lights and/or systems can be turned off overnight, yet some companies need to keep them on since they run their upgrades overnight. Moreover, some companies need to keep the lights on overnight because security sends their dispatchers into the buildings at night. Growing green doesn't necessarily involve a lot of expenditures, but it does require a lot of thinking.

Bringing Green to the Federal Government

Going "green" is all the rage across the public and private sector as environmental concerns continue to rise (Al Gore must be thrilled). Executive Order 13423 requires the federal government to reduce its energy consumption and greenhouse gas emissions by 30% by the end of 2015. Major corporations, such as IBM, Microsoft, HP, CSC, and Sun Microsystems have fully embraced the idea of green technology and have full- fledged strategies for helping government use them to reduce its environmental impact.

What these companies and many others – hopefully your own – have figured out is that lighting a fire under the green IT market in the federal government requires a comprehensive green IT business strategy. Everyone and his cousin claims to be green, but the companies that have a well-defined business strategy that is infused with new messages and - most importantly - focuses on cost savings will be the market leaders.

A Google search on "Green IT" brings up the usual offenders - energy-efficient electronics and virtualization of data centers. These areas are the low hanging fruit, because they are top-of-mind issues for government and areas where progress has been made. Building expertise and teaming relationships to play in these markets could offer real near-term opportunities. The flip side, however, is that these markets could quickly become crowded. If your company is looking for ways to help green the federal government, you can consider the following green technology offerings:

  • Green assessments: Energy audits, infrastructure assessments
  • Green consulting and design: Green infrastructure design, governance program consulting (e.g., procurement processes, training, disposal/recycling, etc.
  • Green solutions: Energy monitoring, power management, application integration
  • There are many other technology solutions that can help government reach its green objectives. Don't forget about some of the "fringe" green IT solutions, which are not necessarily green in and of themselves, but their implementation results in lower energy consumption and better resource utilization. SOA and SaaS are good examples. Scanning and electronic document management technologies, which could save a lot of trees, are another.

    Green IT is all about delivering the same or better performance using fewer resources, so there are many potential technology solutions that can do that. However, government may not think about them as green IT if contractors fail to present them that way. And that all starts with the strategy.

    For more information about developing a green IT strategy for government, view INPUT's latest report, "Going Green: Strategies and Solutions to Serve the Federal Government."

    The Greening of Government – Momentum is Building

    John Johnson enlightened attendees at INPUT's State and Local MarketView conference about the General Services Administration's(GSA) Greening of Government. Johnson serves as the Assistant Commissioner for the Integrated Technology Service (ITS) with the Federal Acquisition Service (FAS), and discussed directions that the GSA is taking to infuse green products in the portfolio and foster awareness to 135 federal agencies and 1800 sub bureaus.

    What is going green – in a nutshell Johnson stated that collectively as individuals and organizations we must become more mindful and understand how our consumption of products and services impacts the environment. Therefore, we must start with behavior changes to minimize further detrimental effects. This speaks to all of us, not just "tree huggers," as some still believe. Corporations have found that they can build teamwork through corporate social responsibility by promoting "green behaviors," which establishes common goals and reap multifaceted benefits - the intangible asset of boosting employee morale along with hard cash savings of power consumption and paper costs through efficiency practices.

    GSA is positioned to drive more effective utilization of technology given the billions of dollars spent through procurement vehicles they negotiate. The groundswell of interest continues as officials are more tuned into the pressing need to improve energy efficiencies. Significant energy consumption is wasted by PC users and much inefficiency can be changed by simply using power saving features. Multiply Johnson's estimate of $75 annually, per pc user over all the units in circulation – that yields tremendous savings of energy and dollars, by merely using power management tools.

    It is no secret that most data center operations substantially underutilize hardware processing capability. As our dependency mounts for servers to provide file storage and the power of search engines, changes must be made to minimize the average of 10 to 12 generators that are found in data centers. Less than 10 years ago 6 million servers were in use; today there are approximately 28 million servers, and estimates project the number to rise to 43 million servers by 2010. Not only is there enthusiasm mounting to support to go green, given growing climate concerns, but there are substantial financial savings that can be realized from reducing power consumption in data center operations. Government is now accessing the correct metric to use to measure efficiency, which is most often, Power Use Effectiveness, (PUE). These standards will be adopted by EPA to establish future policy and guidelines and were addressed in an EPA Report to Congress on Server and Data Center Energy Efficiency.

    Given over $17 billion of procurements through GSA Schedule 70, Johnson indicated that we can anticipate a greening of the schedule. Currently officials are working with the CIO's within federal agencies to bring this direction forward. The greening of GSA's Schedule 70 may spur additional State and Local procurements through Schedule 70 and cascade widespread green procurements, so stay tuned.

    As more focus draws on the need to go green to support mounting environmental issues, vendors must also recognize the importance of deploying practices and building products that minimize power consumption and elicit users to embrace power saving features. Going green is mounting in importance and vendors need to establish practices and not consider them as merely as "a nice thing to do," but rather an important business strategy on all fronts. The Green Business Alliance fosters education and knowledge of how business needs to act. All roles of government and business from IT managers, procurement officials, program managers together with industry, can successfully deploy IT products and operate data centers that are environmentally sound and fiscally responsible.

    From Vision to Action -- Michigan's Strategic IT Plan

    It's not surprising that a state that manages their technology resources as well as Michigan understands that smart investments in technology projects -- those that make government more productive and efficient -- will continue to spend a lot of money on technology. The new IT strategic plan lays out an ambitious agenda for the state's highest priorities.

    The Michigan Department of Information Technology (MDIT) recently released its 5-year strategic plan. Priorities include:

    • Streamlining Citizen Transactions and Self Service -- Identify and implement the latest technologies to make government services more accessible to citizens and businesses. Next steps in this area include:
      • Complete the design phase for the One Stop Business Portal
      • Complete the design phase for the Parolee Tracking Kiosk
      • Pursue and investigate technologies that enable self-service, including centralized contact centers, self-service stations and online web portals
      • Continue working with 19 state agencies to explore which projects would benefit most from technologies to improve productivity and efficiency

    • Citizen Engagement Tools -- Identify and implement the latest technologies to engage citizens in government operations and decision making. Next steps in this area include:
      • Complete an inventory of all citizen engagement activities underway throughout state government
      • Identify a MDIT liaison to focus on citizen engagement opportunities
      • Expand the scope of the Michigan Information Technology Executive Council (MITEC) Citizen Self-Service Committee to include citizen engagement technologies and recommendations
      • Work within the new Innovation and Information Technology Advisory Board to evaluate and report on the Web 2.0/3.0 opportunities for citizen-government engagement

    • Shared Technology Infrastructure -- Share and integrate infrastructure resources between public and private partners, such as data centers, servers and connectivity through fiber, wireless and other communications capabilities. Next steps in this area include continuing the following initiatives:
      • Roll out 18,000 to 20,000 Michigan/1 Adopt standardized desktop packages by the spring of 2008 and complete the roll out by the end of 2009
      • Convert 75% of all states offices to VoIP technology by 2012
      • Have a unified approach to communication and collaboration tools
      • Continue data center consolidation
      • Make Wi-Fi available to all state locations in 2008
      • Manage all cellular contracts centrally by 2010
      • Centralize and standardize LAN solutions for 50% of state users in 2008
      • Consolidate call centers

    • Information Collaboration and E-Discovery -- Facilitate the sharing and integration of data among departments to leverage information and enable quicker and more effective decisions, effectively manage storage, preservation and retrieval of government records. Next steps in this area include:
      • Create a statewide data-sharing strategy and infrastructure called Agencies Sharing Knowledge (ASK)
      • Improve automation and identification of the state's aggregate demand for products and services for leverage in procurement negotiations
      • Standardize and automate human resources functions
      • Create one human services case management system to enable case workers to spend less time on paperwork
      • Develop a new centralized electronic grants system, providing a portal between grantors and grant applicants
      • Develop an inventory management system, providing great visibility to assets, facilities, maintenance, repair and operations functions
      • Continue making progress on implementing the 2006 MDIT Enterprise Architecture Plan
      • Establish a cross-agency team to provide guidance on continuity for enterprise document management initiatives

    • Enterprise Mobility -- Utilize technology to connect state workers to their work at anytime from anyplace. Next steps in this area include:
      • Develop an integrated network strategy that offers manageability, security and connectivity across a variety of networks and devices
      • Incorporate mobile technology in overall IT strategies and policies and consider mobile devices as a part of the state's telephony strategy
      • Improve the delivery of health and human services by lowering overall costs, improving technology and streamlining the way work gets done
      • Incorporation the ability to share data with other governments, such as cities, counties and other states

    • Green IT -- Adopt green principles in enterprise IT facilities, equipment purchases and disposal of equipment. Next steps in this area are:
      • Assess current environment for comparison after changes are made
      • Make current equipment run more efficiently
      • Continue data center consolidation efforts
      • Consolidate critical applications to same servers that require 24x7 uptime
      • Use centralized power management and job schedulers to power off equipment when applications are not active
      • Make use of unified communications that integrate with common business applications to reduce bottlenecks
      • Recycle computing equipment or have vendors buy back hardware
      • Incorporate green IT criteria into IT systems procurements and select based on environmental attributes
    Perhaps no other state has as dire an economic situation as does Michigan. Yet Governor Granholm, according to Governing Magazine, understands the important role technology can play in making government operate more efficiently, "We have consolidated departments. We've eliminated agencies. We've done all that restructuring. But the key to being able to continue to serve and to serve better -- even in these really challenging times -- is through leveraging technology." It's this understanding that has enabled Michigan state government to continue to fund critical IT projects and continue to be a place where vendors who understand the business problems and financial situation, and position their solutions accordingly, can be successful.

    Looking Forward: Green Purchasing

    With the Greening of state purchasing, it is likely that Green IT standards around data center consolidation, recycling of hardware, and virtualization will become more and more prevalent in the future.

    This year's NASPO (National Association of State Procurement Officials) annual conference was held from April 6th to April 8th in the heart of New Orleans, LA. In attendance this year were procurement officials from 41 of 50 of the states. While numerous themes were presented at this years' conference, one in particular seemed to be highlighted repeatedly, and is anticipated to be more and more integral with state procurements in the future: Green Purchasing.

    Even though it was mentioned in many of the conference's informative Regional Roundtable Discussions, attendees were able to learn a great deal about Green Purchasing in the hour-plus session "Green Purchasing and Recycling". Moderated by Diane Lancaster, Chief Procurement Officer, Oregon, with panelists Lee Johnson, Contract Manager, Oklahoma, Dmitriy Nikolayev, Procurement Manager, Massachusetts, Maureen McGuire, Procurement Manager, Ohio and Stephen Reksten, Assistant Director of the Division of Purchasing, Tennessee, this session touched on third party certifications and RFP specifications.

    Ms. Lancaster and her panel discussed in great detail the benefits of Green Purchasing to the environment, as well as, that while her native Oregon has been "Green" for quite some time, other states are just starting to get their feet wet. On the other side of the U.S., Massachusetts has been "Green" for years as well, and their success in the field has led other states to take notice and follow in their foot steps. In Tennessee, for instance, vendors MUST be Green or Energy Star compliant to compete on the vast majority of their competitive bids. States like Oklahoma who are new to Green Purchasing have not yet had any detrimental executive orders or legislation passed to date on the subject, but anticipate that they will be coming down the pike in the very near future.

    When Ms. Lancaster raised the question "What would help more Green Purchasing in the future?", the answers were, competitive pricing, credible information and a better selection on products and services. The panel tried to convey the importance of individual vendors having certification or compliance with some leaders in Eco-Labels, including: Energy Star, Green Seal, and Green-e. Ms. Lancaster and the panel went on to say that while being Green compliant is not a requirement on RFPs currently, it's certain that it will be in the years to come. The panel went on to say that while some vendors may be stubborn now by not accepting the "Green Revolution", they will only be hurting their business in the future by not doing so.

    State Technology Market Hot Spots

    Though fiscal conditions in many states are weak, governors are no less ambitious. The use of technology to increase government efficiency and transparency, communicate with citizens, improve first responder communications and improve health care quality while containing cost are the "hot spots."

    This year 43 governors gave state of the state or similar speeches outlining their priorities for 2008. Forty-two governors* proposed 1,045 new policy initiatives, or about 25 per governor. Like last year about 5% of these initiatives were technology related. INPUT's recently released Industry Insights report, State of the States 2008: Technology Initiatives and Implications, details these initiatives by vertical:

    State of the States Graph

    • General Government -- In 2008 69% of governors proposed general government service initiatives. The big trends were increased accountability, efficiency, consolidation, and Green IT.

    • Health Care -- This year 88% of governors proposed health care initiatives. With the cost of Medicaid consuming almost 22% of states' total spending, it's no wonder governors have been focused on ways to reduce cost. Along with the federal government, states are also attempting to transform the health care industry to one based on quality instead of transactions. Health IT continues to be of great interest and INPUT believes several states have forged ahead of the federal government in this area. A new trend in health IT is transparency web sites, which allow consumers to comparison shop and make better, more informed decisions about their health care. Sara Palin of Alaska and Jim Doyle of Wisconsin both proposed new transparency projects in their state of the state speeches.

    • Homeland Security -- In 2008 18% of governors proposed homeland security initiatives. Providing funding for public safety interoperable communications continues to be the most important technology priority.

    • Justice and Public Safety -- 67% of governors proposed justice and public safety initiatives. Many governors are looking to alternatives to incarceration for non-violent offenders in order to reduce the cost of corrections, which is the second fastest growing component of state budgets. They are looking at GPS tracking and monitoring technologies and better case management tools for probation and parole officers. Vendors should also expect states and localities to become interested in reducing the cost of inmate health care by employing health IT.

    • Social Services -- This year 55% of governors proposed initiatives in this vertical, up from 47% last year. Veterans and military service personnel returning from Iraq or Afghanistan are at the top of the agenda. However, there is continued interest in making programs such as Food Stamps, Temporary Aid for Needy Families (TANF), child welfare, child care, and child support enforcement more efficient. This includes mobility devices for social workers so they can spend more time in the field as well as enhancing and modernizing existing systems.

    For more information on the verticals discussed above as well as Community Development, Economic Development and Regulation, Education, Natural Resources and the Environment, Public Finance or Transportation, download a copy of the executive summary or purchase the full report.

    *Governor Ted Kulongoski of Oregon gave his speech to late to be included in INPUT's report.

    More information about transparency websites and legislation nationwide can be found in INPUT's latest Industry Insight report "State 'Transparency' Websites Provide Immediate Insights and Long-Term Opportunities for Vendors" (July 2008).

    Green IT, Best Practice not Fad

    Feds, states, and locals (in addition to private sector) are all talking about Green IT. Unlike other fast-burning trends in the IT market though, green IT brings together technological, social and economical factors to establish itself as a best practice rather than a fad.

    In an effort to share these best practices at the local level, the National Association of Counties (NACo) has launched a Green Government Database that collects information on all things green including green programs, policies, plans, and staff descriptions. The creation of the database has been driven by the groundswell of interest and action in going green from local governments. Locals to a large extent have been adopting green practices independently of any federal or state guidance.

    This again exemplifies the nature of the green movement; it is really about individual awareness of energy and ecological concerns. Fortunately for the IT industry, this socially driven shift is coupled with potential economic savings thus increasing adoption by governments with tight budgets. Great cost savings are achievable in the energy usage of the hundreds of thousands of desktops in federal, state, and local offices with simple power management tools. Speaking of desktops, organizations are asking themselves if a thin client environment will satisfy the end user needs while sipping energy in comparison to desktops. Agencies are also scrambling to streamline data centers, where usage of server virtualization software in combination with new higher performance servers and cooling technology can decrease hardware, energy and real estate costs by 80% or more.

    The key for those wishing to help the public sector in adopting green best practices is to adopt these practices with their own organizations, live the changes and share the benefits with their public sector partners.

    Seeing Green in Green

    It is a wonderful thing for a life-long environmentalist to see governments and vendors scrambling to be green. I am not bothered one bit if the motivation is to make or save money either. I don't think it is possible to peruse a public sector rag without a headline or two pointing out data center innovations here or new purchasing policies there. As this practice gains momentum, the Feds now have added some real steam to the process.

    On December 26, the Federal Acquisition Regulation Council released an amendment to FAR that will require agencies to give preference to EPEAT (Electronic Products Environmental Assessment Tool)-rated PC's and related hardware.

    The Office of Management and Budget released a proposed policy letter on December 28 that provides structure for agencies to acquire environmentally friendly products and services including high-efficiency vehicles, bio-based and EnergyStar products, EPEAT rated electronic products, recycled products, and intelligent material selection. Under this proposed policy, GSA will populate their catalogs with green products and phase out competing non-green products by 2010.

    The greening of GSA's Schedule 70 could prove to bolster it's usage in the state and local market. If GSA can get these green products in their catalogs quickly, it could save the states a lot of effort in identifying and negotiating contracts for green products themselves.

    In addition to new products, disposal of electronic waste is just as important an issue in overall greening. The Commonwealth of Kentucky is currently investigating it's options in adopting responsible disposal of electronic equipment through an RFI on January 9, 2008.

    INPUT's Take:

    • Vendors who can establish purchasing vehicles for states to obtain green products will have a major competitive advantage
    • build on already impressive growth in state and local government usage by quickly including green products in Schedule 70
    • Look for more and more states to establish contracts for responsible disposal and recycling of electronic equipment