PG&E needs VARs for program offering as much as $4M rebate to customers

Through a unique virutalizatoin rebate program, California's Pacific Gas and Electric Company (PG&E) is pushing virutlaization and wants VARs to help

When Pacific Gas and Electric Company (PG&E) announced the first-ever rebate program designed to reward companies that replace real computers with virtual servers, it did more than advance a program that will encourage energy conservation; it gave value-added resellers (VARs) and systems integrators one more selling point to evangelize virtualization to California's business community.

According to the announcement earlier this month, PG&E customers in northern and central California, can earn a maximum rebate of $4 million per project site for eliminating physical servers and the electricity they draw from the public power grid.

The incentives, which are based on the amount of energy savings achieved through data center consolidation, may just be the final bit of encouragement that will convince customers to sign-off on pending projects, some VARs said.

"I think this will give customers the incentive and push them to get projects that were maybe on the fence done," said Jason Geis, director of sales for systems integrator Blue Chip Tek., based in Sunnyvale, Calif.

"VARs and systems integrators probably have the greatest potential for making this happen."
Randall Cole
senior project manager, PG&E's customer energy efficiency department

Meanwhile, PG&E said it's depending on VARs and integrators to make the program a success, emphasizing not only the rebate, but also the $300 to $600 per server a customer can save on the power required to run each server. Since each server costs a data center about as much power in cooling and ventilation as it does to power the machine itself, customers could double that savings as well, PG&E calculates.

"We are going to hit VARs and systems integrators as much as possible because they know the most likely customers for virtualization," said Randall Cole, senior project manager, at PG&E's customer energy efficiency department. "VARs and systems integrators probably have the greatest potential for making this happen," Cole said.

Still, some VARs worry that getting the rebate may not be as easy as PG&E would lead some to believe.

"The press release is great, but it's harder to get the money than it seems, and there's a lot of calculations you have to go through," said Steve Kaplan, president of systems integrator AccessFlow Inc., Sacramento, Calif.

Rebates must be approved through a bureaucratic process regulated by the Public Utility Commission and be independently verified by auditors, Kaplan said. However, Kaplan still believes the program is a selling tool for VARs and systems integrators who are making a case to IT managers who in turn have to sell the idea of virtualizing their storage infrastructure to a company's management team.

"Part of our role is to help IT people sell the concept of virtualization to their management. It's worth the effort and it validates the whole virtualization paradigm," Kaplan said.

In the meantime, customers that have not virtualized are having a hard time with power constraints, Blue Chip Tek's Geis said.

"We've seen customers whose data centers get so hot that servers are shutting themselves down, they can't access mission critical data applications and sometimes data is lost," Geis said.

Because these difficulties exist, it makes sense to offer a rebate program, which could help system integrators help their customers to get more money back for their virtualization efforts.

"The power constraints our customers have are some of the biggest problems that they are dealing with, so from our standpoint we'll embrace any program that helps to resolve these issues," said Geis.

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