Green IT Gains in the Economic Downturn

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London July 20

The current global economic recession has squeezed IT budgets, hindered capital expenditure and generally slowed the growth of IT development. However, according to a recent report from independent market analyst Datamonitor, 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 organizations evaluate, budget for and deploy green IT,” said Rhonda Ascierto, senior analyst at Datamonitor and author of the report, which is titled “Can Green IT Bloom in an Economic Downturn?”

“The downturn has also resulted in green IT trends for data centers, client devices and asset lifecycle management, as well as reshaped 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 — such as data-center virtualization, data-center design and layout, and asset lifecycle 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, organizations 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.

Further, flat IT-budget growth also means that organizations that face critical data center limitations, such as a shortage of floor or rack space, are looking to software or outsourcing alternatives, as well as building new data centers or upgrading existing facilities. Those alternatives include IT leasing, managed services, virtualization software, cloud computing and software-as-a-service (SaaS).

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

However, the greatest demand for green IT will be in the area of data-center virtualization. Data-center virtualization is becoming more holistic, whereby various assets — including servers, storage, communications infrastructure, and business applications — are being virtualized across a pool of data-center hardware. Datamonitor believes business applications are the next frontier for data-center virtualization.

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