Normally, the improvement in the infrastructure of a company is done to improve the cost of providing a good or service in the marketplace. The Age of the Industrial Revolution is replete with stories of companies that would essentially lay off their entire workforce while re-tooling their factories to be more competitive. When a new and more efficient steel making process became available Andrew Carnegie furloughed his entire workforce while his steel mills were overhauled to ensure long-term competitiveness.
Are these economic considerations the only reasons to implement new and more efficient - that is in this case energy efficient - technologies? The normal economic force that causes replacing equipment in many industries does not always provide enough benefit to warrant new capital investments. Let's focus here on the telecommunications industry.
Today, most nationwide telecommunications carriers have depreciated virtually their entire infrastructure to zero. In short, the finance folk do not think it costs them more than the cost of maintenance, so spending millions in capital does not make sense to them merely to keep the revenue they already have. This has lead to telecom facilities that are chock full of older equipment providing less capability and capacity than systems that can be bought today – especially in terms of functionality per Watt. If companies held onto computer systems like telecom companies hold on to transport equipment and routers, then corporate data centers would have 100 MHz Pentiums floor to ceiling covering acres. Even the government replaces on a regular schedule supercomputers worth tens of millions of dollars to improve the ability to predict the weather and other critical modeling problems.
When it comes down to it, nationwide telecom companies are real estate companies. A typical carrier will have hundreds of points-of-presence (POPs) adding up to millions of square feet of space. So, would it not make sense to get the most use out of a limited space? Would it not make sense to make the most efficient use of the available power and cooling? Of course it does. Another way of putting this is why are telecom companies not starting in earnest to become as efficient as possible to reduce costs and to reduce their environmental impacts?
So what is the hold-up for telecom companies making the same rip-and-replace decisions that Andrew Carnegie and virtually every person that uses information technology? It is certainly not the technologists at telecom companies, nor is it the line operations staff that has to deal with older equipment and its attendant maintenance requirements and issues.
There are probably several aspects that have restrained changes:
- It is hard to justify replacing equipment that has no costs basis with new equipment only to keep the same revenue
- It is hard to quantify the dollar value of power and space costs savings of replacing equipmentIt is hard to quantify the reduction in operations staff and improvement in service deployment time that reduces costs and increases revenue
- There appears to be a brain-drain in the application of sciences, such as Operations Research, to the operation of telecom companies so understanding the real savings in technology changes cannot be developed with accuracy
- Executives are not measured on ensuring that their company is in good shape three years from now (because their network is more efficient and there is power and space to continue growth) but whether revenue or margin increased this year or even this quarter
- There are few external pressures such industry recognition or government regulation to make investments
So, what can be done? Somehow we need to find some way to make incentives to fix this problem. One possible solution is to extend the EPA Energy Star rating to services as well as products. Will consumers preferentially buy from a company that produces less pollution than a competitor company for a megabit of data transported? Is this also an ethical issue?
Clearly, bandwidth demands are going up and they are enabling applications that people demand and expect. It is hard to believe that reducing bandwidth demand (like reducing energy consumption) is a viable option. Especially if you believe that telecommunications services, enabling for example Cloud Computing, is the key technology to improve productivity and grow the economy in an environmentally sound manner.
