The Other Green

Large organizations will drive the biggest gains in energy efficiency because that’s where the costs are concentrated.

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The human memory is rather short when it comes to certain things. Energy efficiency is one of them. While they may cringe at paying $4 a gallon for gasoline to fill of their car, they were convinced that drastic measures were necessary when gas hit $1 a gallon.

And while consumers collectively account for the vast percentage of energy consumed, individually they don’t consume enough to make the kinds of hard choices that have been predicted for the better part of two decades. Solar is still not a high-enough volume market to make it attractive without government subsidies. Hybrid vehicles still aren’t economically beneficial, and all-electric vehicles might never hit volume without some serious subsidization.

Businesses—particularly large corporations—are another matter. One of the basic reasons for existence of corporations is that they can achieve economies of scale on all fronts. That also means they have a reason to act on things that to most people are just an annoyance, such as rising energy costs. While an increase of $100 a year may not be enough motivation for a homeowner to replace a computer or even a water heater, an increase that runs into the six or seven figures can get very quick action inside a company.

Banks and credit card companies have enough money in play to even see a significant gain from a float, the interest gained by delays in paying their own bills over a short period of time. That’s sometimes even noticeable in changes of a day or two. When airlines cut out pillows they save millions of dollars. And when employees take their portable devices home at night and charge them they’re probably contributing significantly to their employer’s bottom line. Multiple even a dime a day for 1 KwH by 100,000 employees and it comes out to $50,000 a week, or $2.6 million a year.

The same will be true of cloud-based services and shared resources of any sort. The challenge has always been maximizing the use of resources—idle time costs money—while making sure enough resources are available to do the job. In the EDA world there will be a clear future for cloud-based services such as emulation, debug and verification, in EDA, just as there are clear advantages to centralized computing in other areas. Apple’s new operating environment, Lion, is a recognition of the importance of shared resources. So are most of the new services being offered by companies such as IBM, Microsoft, Amazon, Oracle and HP.

In consumer electronics, it’s not so much economics driving the shift to more efficiency as the annoyance of shorter battery life. And in cars, the big question now is whether time between fill-ups is more important than a few extra miles per gallon or per charge. But for any technology makers looking to really earn profits on green, the key will continue to be big bottom-line savings among companies and organizations that have sufficient scale to make those savings really matter.


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