Rapidly growing IT infrastructures and high power costs had made technology executives to have more than enough reasons to explore green, sustainable IT strategies. Green IT is an ever-increasing demand for IT innovation that advances strategic organizational goals only compounds these challenges. Implementing a green IT view, striving to drive costs out of IT infrastructures will help free capital resources for strategic investments.
Executing a green IT strategy can help companies to minimize power consumption, maximize resource utilization, reduce management complexity, and decrease operational costs while dramatically improving overall enterprise efficiency. Quantifying data center efficiency helps to establish return on investment (ROI) for IT projects and data center infrastructure costs. In addition, measuring efficiency in terms of IT work performed—not just energy consumed—can be critical to building a true picture of the value of green IT.
1. UNIVERSIDAD EUROPEA DE MADRID
ESCUELA SUPERIOR POLITÉCNICA
ÁREA DE INDUSTRIALES
BUSINESS PLAN FOR A GREEN IT
SERVICES START-UP BUSINESS
Alumnos: Luis Manuel González Morales
Jorge Saldaña Alegre
2. IDEA GENERATION
(Gartner) Over the next three years, most
companies will spend more money on energy
(power and cooling) than on IT infrastructure.
(IDC) Over 40% of printed paper consumption can
be avoided with good sustainability practices.
(PC Energy Report) 90% of the desktops have not
implemented any energy management policy.
3. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
Green&TIc is a start-up company based on the
implementation of “Green IT” practices in the
organizations for purposes of:
Environmental Responsibility
Cost Savings
4. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
What are “Green IT” practices?
Efficient use of technology in organizations to:
Minimize the environmental impact.
Maximize the economic feasibility.
Why to implement “Green IT”?
Environmental impact
Energy production is currently less than we need.
CO2 contamination.
Global warming.
Costs
Energy consumption
Taxes for CO2 emissions
5. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
LIGHTING
For instance…
KWh / Year Cost
100 W, 24h during 365 days: 876 KWh 100%
Used for 6 hours: 219 KWh 25%
Energy savings:
73,90€ from (93,58€) per year / device
6. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
COMPUTERS
Idle (W) Sleep(W) Savings (W)
PC 67,3 3,3 64,0
Monitor LCD 17” 35,3 2,3 33,0
Paying 0,11248€ / KWh, savings up to:
Total hours per year: 24h x 365 = 8,760 h
Total operation85,50 € per
PC / xyear weeks
hours per year:
10h 5 x 52 = 2,600 h
Inactivity hours per year: 8,760 h – 2,600 h = 6,160 h
•100 PCs: 8550 €
•1.000 PCs: savings Idle vs. sleep:
Potential energy
85500 €
savings with LCD
W / Year (sleep) Savings/Year (sleep
W / Year (idle)
vs idle)
PC with LCD 632,02 34,5 597,52
7. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
GREEN IT IS NOT ONLY ENERGY...
Using less paper
Controlling Printing Configuration
Assigning local policy printing to avoid “IMPRIMIR EN LA
INDIA”
Using printing preferences: double page, two pages per
paper, etc.
Using Electronic Invoicing (such as PDF format).
8. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
TURNING TECHNOLOGY OFF...
Turn off is not always to unplug
Using Stand-by and Sleep modes
Machines start faster from sleep mode.
Receiving data is not an excuse to turn devices off
New systems support “Automatic WakeOnLAN”
9. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
It is also about... IMPROVING BUSINESS PROCESSES...
TELEWORKING RECYCLING
Using software to share Not only paper but also
documents, sheets, etc. equipment.
TELEPRESENCE GREEN SENSIBILIZATION
Using video, audio and web To inculcate Green practices
conferences. within the organization.
10. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
about SERVERS...
Between 10%-30% of servers
do nothing
What to do?
VITUALIZATION
It is about merging several virtual
servers in a physical one
12. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
about SERVERS...
CONSEQUENCES
• Reduce the number of servers
• Reduce the space utilization
• Power and Cooling Energy savings.
13. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
SWOT Analysis
S Strengths
W
Weaknesses
• Know-How • Business Size
• Complementarity between the • Recent creation so there is not
partners customer references.
• Minimum annual costs very • Reluctance of customers to
low new changes.
Opportunities
T
Threats
O
•Guidance to care for the
environment and cost savings
• Legislative changes.
• Sustained rise in energy prices • Competition from large
• Support of public administration consulting firms that are now
efficiency. (Incentives) increasingly in the field of
• Market expansion action.
• Few companies exclusively • Unknown Sector
dedicated to Green IT
14. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
Luis Manuel González
Morales
Engineering Operations &
Marketing Sales
(R+D) Human Resources
Jorge Saldaña Alegre
Our Background: TELECOMMUNICATION ENGINEERING DEGREE
UEM ‘2009
15. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
MARKET ANALYSIS
The IT industry has been steadily growing over the past
years.
The percentage is also expected to grow as the first
of the “baby boomer” IT enterprises generation begins to
change to the new green technologies in the new decade.
It is estimated that the green IT technology would
account for 4.8 billion dollars in 2013 (Forrester).
16. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
STRATEGY
Our differentiation strategy is to make money from our
customers savings.
Being "green" and cost-effective is possible.
Energy is a limited resource and has to be achieved with
high efficiency, low environmental impact and the lowest
cost.
17. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
TARGET MARKET
Data Centers Public Institutions
TARGET
T
MARKET
Educational A Healthcare
Organizations R Organizations
G
Non-Profit
Real State E
Organizations
T
Equipment Manufacturers Non-Profit Organizations
In general, every organization conscious of being environmentally responsible
and wants to make savings in its capital expenditure
18. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
Our
Services...
Server Electronic Green Green Green Recycling
Virtualization Invoicing Technology Adjustments Printing
20. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
FACILITIES
• Madrid.
• Greatest concentration of potential
customers.
Headquarters • Support by the Council for entrepreneurs.
• Financed by the CouncilLow Cost.
• Full-equipped offices.
• Common areas (meeting rooms, printing
Enterprise room, etc)
incubator • Security, Cleaning and Maintenance.
22. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
Legal Form
Sociedad Limitada Nueva Empresa
Corporate Social Responsibility
Added value for Green&TIc trough active and voluntary
contribution for:
Social improvement
Economic Improvement
Environmental Improvement
23. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
The Numbers... YEAR 1
Opening Blance
Income Statement · 3 Years Projection
Sales Turnover
Cash
Debit
Total Cash Available
Overheads
Rent
machinery
laptops
projector
peripherals
printer
Telephone + Internet
Post
Insurance
Sundries (petrol,CSR,...)
Car- Sales (Renting)
Software (Licenses)
Maintanance (SGCOL)
Total Cash Out
Total payments
Net Cash inflow
Closing Balance
INCOME STATEMENT: PAGE 127 OF THE BUSINESS PLAN
24. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
The Numbers...
LIABILITIES AND SHAREHOLDERS'
ASSETS
Year 1 Year 2 Year 3 EQUITY Year 1 Year 2 Year 3
Current Assets Current Liabilities
Cash 10.000 1.860 19.298 Short-term debt 0 0 0
Notes Receivable 0 0 0 Current maturities of long-term debt 0 0 0
Accounts receivable, net 0 0 0 Accounts payable 0 0 0
Inventory 0 0 0 Income taxes payable 0 0 0
Other 0 0 0 Accrued liabilities 0 0 0
Total Current Assets 10.000 1.860 19.298 Other 0 0 0
Long-Term Assets Total Current Liabilities 0 0 0
Property, plant, and equipment 4.000 3.200 2.400 Long-Term Liabilities
Less accumulated depreciation 800 800 800 Long-term debt less current maturities 10.000 10.000 10.000
Net property, plant, and equipment 3.200 2.400 1.600 Deferred income taxes 0 0 0
Other long-term assets 0 Other long-term liabilities 0 0 0
Total Long-Term Assets 3.200 2.400 1.600 Total Long-Term Liabilities 10.000 10.000 10.000
Total Assets 13.200 4.260 20.898 Total Liabilities 10.000 10.000 10.000
Shareholders' Equity
Common stock 0 0 0
Additional paid-in capital 10.000 10.000 10.000
Retained earnings 1.860 19.298 60.736
Other 0
Total Shareholders' Equity 11.860 29.298 70.736
Total Liabilities and Shareholders' Equity 21.860 39.298 80.736
BALANCE SHEET: PAGE 130 OF THE BUSINESS PLAN
25. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
NET PRESENT VALUE (NPV)
Year Cashflow Discount Factor Present Value
0 -10000 1 -10000
1 1860 10 1690,909091
2 17438 10 14411,57025
3 41438 10 31132,98272
NPV 37235,46 €
The NPV is positive, that means the cash inflows from our capital
investment will yield a return in excess of the cost of capital, and so the
project SHOULD BE UNDERTAKEN.
26. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
IRR (INTERNAL RETURN OF INVERSION)
The internal rate of return (IRR) method is to calculate the exact
Discount Factor rate of return which the project is expected to achieve
A = Lower rate of return with a
P positive NPV
IRR A xB A B = Higher rate of return with a
P N negative NPV
P = Amount of the positive NPV
N = Amount of the negative NPV
NPV value for 1,05 DR -133,34 €
NPV value for 1,00 DR 469,25 €
IRR=103,89% The project SHOULD BE
UNDERTAKEN.
Higher than the cost of capital 10%
27. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
PAYBACK
It simply works out how long it takes for the cash inflows
from our investment to equal the cash outlay.
In the 1st year we earn €1860 1 YEAR
+ +
We need another €8140 to €8140
make up the €10000 invested
In the 2nd year we earn €17438
€10000 1,47 YEARS
We earn enough money to make up the €10000 in 1,47 YEARS
28. MARKET
INDUSTRY PROJECT
PROYECT DEFINITION ANALYSIS & INVESTMENT CONCLUSIONS
ANALYSIS ORGANIZATION EVALUATION
INDUSTRY
Green IT technology estimated to account
MARKET for 4.8 billion dollars in 2013.
-The NPV is positive (37235,46 €) OK
PROJECT
EVALUATION - IRR = 103,89% > 10% (Cost of Capital) OK
- Payback = 1,47 year OK