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Energy-efficient technology sales depend on pitch

Don't bother trying to sell energy-efficient technology by emphasizing "green computing." VARs say customers look for other factors.

Even with the hype surrounding green computing, VARs say that energy-efficient technology is still not a big selling point in their business.

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VARs have to show customers that being green will save them green. Customers are attracted to technology that will save money and reduce power consumption, but stating that it is energy-efficient isn't enough to make a sale.

"If you can show [customers] how a green solution saves them power and money, then they're more likely to jump on the bandwagon," said Perry Szarka, strategic business unit leader for the converged network group with MCPc Computer Products & Consulting Inc. in Cleveland.

The roadblock for green technology adoption seems to be a lack of understanding. Customers have a hard time grasping that being environmentally friendly could mean having a faster server that uses less energy.

"If you mention green to most people, they roll their eyes. If you address power cooling, floor space, boosting performance, increasing capital, supporting the business at a lower cost per server, then that's what they're trying to do. People think green is about reducing carbon footprints and recycling. They don't equate it with boosting productivity and addressing data storing issues with a fraction of the budget. It's all about how you sell [green technology]," said Greg Schulz, founder and senior analyst of The StorageIO Group in Stillwater, Minn.

Appeal of Energy Star hardware remains unproven

In May 2009, the U.S. Environmental Protection Agency announced the first Energy Star requirements for servers. Servers earning the Energy Star label must have power supplies that conduct less heat; be able to measure real-time power use, air temperature and processor utilization; offer advanced power management features; and include a power and performance data sheet that lists energy performance, features and other capabilities.

A 2009 Energy Efficient IT Report by CDW Corp. surveyed 752 U.S. IT professionals to study IT marketplace attitudes toward energy-efficient IT. The report showed that 46% of respondents have implemented or are implementing server virtualization, versus 35% in 2008. Fifty-seven percent are buying Energy Star qualifying devices (not specifically servers) versus 31% in 2008.

But the label alone isn't enough to persuade customers to pay a premium. Customers are going to inspect the cost of ownership and productivity of the hardware.

Some customers "will go out and buy equipment just because it saves energy. But there also has to be a clear return on investment [ROI] that shows it actually will save money. Customers will go out and buy technology that is more productive, rather than just energy efficient," Schulz said.

If the VAR can demonstrate ROI over a short period, and show customers that the purchase will pay for itself in six or nine months, they are willing to pay up front.

"Each customer has break-even measurements within their business, and if you don't match that, then they're not going to spend the money. If the product has a premium, and you're not able to meet their internal payback criteria, they won't invest just because the equipment is energy efficient," said Dave Lasseter, vice president of power systems sales at Mainline Information Systems, a Tallahassee, Fla.-based solutions provider.

Energy efficiency takes a backseat

VARs agree that cost, reliability and compatibility will always outweigh energy efficiency in the purchasing decision. As with all project implementations, VARs have to demonstrate that they're going to save customers money on operational costs. An easier-to-manage product and a long-term warranty could easily beat out energy efficiency on the purchasing decision list.

"It used to be a three-year warranty is OK. Now, customers want five-year warranties from companies that are sure to be around in the future -- like HP, IBM or Dell," Szarka said.

Cost will always outweigh energy efficiency, and it is constantly number one on customers' lists in a difficult economy. If customers aren't looking at the overall benefits of the technology -- the power, cooling and utilization -- then they're making a pure cost decision.

"Customers spend time evaluating, and they need justification to move from one technology to another. [Changing technologies] requires manpower for application migration, database migration, conversions and so forth. [Customers] consider these factors when they're evaluating all kinds of technologies, not just energy-efficient technology," Lasseter said.

Where green IT counts

But, even though energy efficiency isn't at the top of everyone's list, experts agree that green IT does drive innovation and sales for some technologies beyond virtualization. Fast Fibre Channel disk drives, deduplication, virtual tape libraries and storage devices have seen improvements because of green initiatives.

"I see advances in some of the new disk drives and the performance space. ISCSI Fibre Channel drives are become more energy efficient," Schulz said. "[Customers] have more I/O per second per watt of energy. The large capacity 1 TB or 2 TB drives can accomplish more data per footprint per watt of energy. And new Intel Nehalem chips allow you to do more work per watt of energy."

Customers' internal measurements of resource utilization is important. And virtualization is part of everyone's plan. Customers want to make sure they actually use all that they buy.

"Having a capacity that is running less than 50% utilization is less than acceptable today. Customers desire a highly-utilized environment with 80% range for servers so that you get efficiency. The days of buying a server for a single application are gone. A product by itself is not enough. A product with virtualization makes changes and benefits customers," Lasseter said.

Challenges for implementing green technology

For integrators and VARs, the focus should be on helping the customer justify the potential purchase by either pointing out the savings or the consumption benefits. "You have to be able to show the customers, 'here's what other clients in the industry have done, and they're successful.' You have to show them success cases from companies that are similar to their size and that had the same hardware that they do," Szarka said.

Current economic conditions have added more financial scrutiny. All investments, purchase decisions and acquisitions go up to higher levels of management approvals. In the past, when approval by a department head may have been sufficient, more expenditures now require a C-level executive to sign off. And those executives are telling their IT departments to only consider technologies that have great paybacks.

"Before the recession, customers were looking at a two- to four-year payback period. Now, they're looking at 12- to 18-year payback. If there's no payback, it doesn't move forward," Lasseter said.

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