A new article by the McKinsey Quarterly revisits the relationship between the global thirst for data and its consequent growing carbon footprint.

Already, the world’s 44 million servers emit carbon at the rate approaching that of countries such as Argentina or the Netherlands.  Data center growth forecasts for the U.S. will be the equivalent of ten new power plants in the next 1-2 years alone.  In the business-as-usual model, uncurbed demand would quadruple carbon emissions from data centers worldwide by 2020.

The bad news is not only environmental, but ultimately affects business’s bottom line. The increasingly complex analysis done by companies, as well as now common features such as real-time access, technology-intensive collaboration tools, and computing, storage, and networking capacity means the current 25% share of corporate IT budgets taken up by data center costs will only climb higher.

The factors driving this increase are a greater number of servers coupled with a growth in the price of electricity beyond that of corporate revenues or other IT costs.  We are beginning to witness a trend of data center costs diverting capital from new product development and squeezing margins.  Intensive users of information such as finance, information services, media, and telecom will have to find effective solutions for the long-haul to remain profitable and competitive.

Efficiency is Key, Preferably to Zero

Israel being such a large center of ICT innovation, products, and services, it contributes to the carbon footprint caused by data centers disproportionately with its size and population.  But will the fruits of Israel’s IT labor fertilize or poison the fields on its environmental and economic horizon?

The good news is that cyber-infrastructure allows for relocation of data facilities to anywhere in the world, so that the ICT industry can greatly reduce its emissions by relocating computing resources to zero-carbon data centers powered either by solar, wind, hydroelectric or geothermal sources.  Or better still, as the McKinsey article notes, “the greenest data center is the one that you don’t have to build,” meaning that efficiency and putting current underused capital to full use will make a significant difference.

There are currently at least 100 zero-carbon data centers around the globe and substantially more expected in the next decade.  Many of these are being built by big ICT companies like Google and Microsoft, and even popping up in ambitious and oil-abundant states.  So far, Israel does not have any initiatives to build a zero-emissions data center.  If it did, the ideal place for it would be, of course, in the white hot Negev, where it could be built underground or cooled with solar energy.  Israel would finally be able to put its natural resources of sun and open desert to additional good use.  Yet, however enticing the idea of a zero-emissions data center may be, we should look first to more easily adopted efficiency technologies in the meanwhile.

Considering the flurry of IT activity that took places at the start of the millennium, one is tempted to think the same process will repeat itself in the search and application of cleantech solutions to IT’s lingering legacy, specifically in efficiency metrics technologies and delivering electricity from renewable sources to data centers.  Israeli cleantech startups that focus on energy efficiency, such as Vintec Knowledge, LV Power, C.Q.M., and Catom Energy, and alternative energy & fuel technologies would indeed have a natural point of insertion.

Some of the reasons for the delay in building zero emissions data center are underlying differences between the IT and clean tech sectors.  In IT, for example, there is a reasonably high incentive to be the first to adopt, due to low entry barriers and rapid turnover of technology.  In cleantech, potential adopters are wary, and want to see proof of success somewhere else first before making large capital investments. With plug and play technologies, this wariness is reduced, and provides the bridge between a do-nothing present and an anticipated-but-uncertain future.

As more and more businesses and entire sectors worldwide start to feel the energy-to-margin pinch, Israel can once again become an innovation leader by providing cleantech solutions. Through new applications, common sense solutions, and especially integration of cleantech with software and communications, businesses can be reinvigorated and sent on the green path to economic growth.

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