Green IT gains in current economic times

The current global economic recession has squeezed IT budgets, hindered capital expenditure and generally slowed the growth of IT development. However, according to a report just published by independent market analyst Datamonitor, ‘Can Green IT Bloom in an Economic Downturn’, it may also prove to be a significant upside to the market for green IT.

“The global economic recession has spurred a paradigm shift in the way organisations evaluate, budget for and deploy green IT,” says Rhonda Ascierto, senior analyst at Datamonitor and the report’s author. “The downturn has also resulted in green IT trends for data centres, client devices and asset life cycle management, as well as re-shaped return on investment (ROI) models.”

Current green IT investments are driven by compliance with environmental legislation and cost savings. In particular, green IT that eliminates the need for capital expenditure (capex), such as data centre virtualisation, data centre design and layout, and asset life cycle management, has become increasingly important as IT budgets remain constrained.

Datamonitor research shows IT budgets are likely to remain flat in 2009, which means cost-effective green IT is likely to increase in demand. As such, organisations no longer regard green IT and cost-effective IT as being mutually exclusive. This represents a significant paradigm shift and bodes well for the future evolution of the global green IT market.

Restrained IT budgets also mean that green ROI models are becoming compulsory and shorter. In order for green IT vendors to satisfy new ROI requirements, they are being forced to develop more efficient and greener IT solutions.

Flat IT budget growth also means that organisations that face critical data centre limitations, such as a shortage of floor or rack space, are looking to software or outsourcing alternatives to building new data centres or upgrading existing facilities. Those alternatives include IT leasing, managed services, virtualisation software, cloud computing and software-as-a-service (SaaS).

Datamonitor believes data centre resources will increasingly be hosted in a cloud computing environment, which should — at least theoretically — fall under the green IT banner.

However, the greatest demand for data centre green IT will be for data centre virtualisation. Data centre virtualisation is becoming more holistic, whereby various assets, including servers, storage, communications infrastructure, and business applications, are being virtualised across a pool of data centre hardware. Datamonitor believes business applications are the next frontier of data centre virtualisation.