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Green IT – Making the Big $witch
Greg Rowntree
Manager Technical Support Services
Who is Insurance Australia Group?
PAGE 2
As an Insurer, Sustainability relates to everything we do...
In 2006-07 we paid over $5b in
claims. Our aim is to get
customers back on the road, back
at work, or to replace their goods
as quickly as possible.
We set premiums before the cost
of claims is known. Our challenge
is to anticipate the potential risk
and price it accurately and fairly,
ensuring our customers receives
consistent value for money.
Expertise in managing risk is vital
to our long-term viability.
Reducing risk in the community
ultimately helps prevent claims
from happening in the first place.
This not only makes good
commercial sense, but fewer risks
mean customers can avoid
unnecessary hardships, and can
benefit from lower premiums while
our communities are much safer.
The economics of the Group’s
business are based on scale.
Scale allows access to volume
discounts across the supply chain,
without sacrificing quality. For
customers, that means better,
more competitively priced products
and services. Our aim is to
leverage this scale to keep to a
minimum the “friction” costs
between premiums and claims.
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... And therefore we have an important role to play in
leading discussions on climate change…
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… with Climate Change linked to CO2 emissions, what
contribution does Information Technology make?
“The Australian Computer Society has undertaken an
emissions audit on the amount of carbon dioxide being
generated by ICT usage by Australian Businesses.
The results of the audit indicate that ICT use by Australian
Businesses generated 7.94Mt of carbon dioxide in 2005,
equivalent to 1.52% of total national carbon dioxide
emissions.
To put this figure in perspective road transport accounts for
12.6%, industrial processes 5.3%, metal production (mostly iron
and steel) around 2.3%, the cement industry around 1% and
civil aviation just under 1% of total national carbon emissions.”
Source: ACS, Green ICT Policy, August 2007
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…And within Financial Services organisations, IT is the
biggest direct contributor to environmental footprint…
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…Providing the impetus to develop and maintain a policy around
managing the environmental aspects of our IT operations…
Greener IT Policy
• IT significantly impacts the environment
throughout its entire life cycle.
• It should not be a one-off programme, but
form part of the organisation’s overall IT governance and
decision framework.
• Initiatives have to align and support the organisations
corporate goals and objectives.
• IT's environmental impact can be significantly reduced
by behavioural changes, alongside technology changes.
• Many green IT initiatives can be easily tackled at no
incremental cost.
PAGE 7
Within IAG, we have focused on a couple of key areas…
• Office locations
• Widespread use of teleconferencing and collaboration
technologies, reducing air travel.
• Installation of automatic light switches.
• Utilising energy efficient light bulbs.
• Usage of 5 Green Start energy efficient buildings.
• “Work from home” pilots underway across Australia & New Zealand.
• Data Centre and computing environments
• Regular proactive monitoring of environmental attributes across all
datacentre sites.
• A continuous improvement programme.
(Not just for when environmental limits are being approached)
• Virtualisation of our IT infrastructure has significantly reduced our physical
footprint across all server, storage and network infrastructure, significantly
reducing energy consumption.
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% of total data center electricity use
Where does all the energy get used in the Data Centre?
Cooling systems
35
Electrical and building systems
30
25
20
15
10
5
0
Chiller/
cooling
tower
Humidifier
Computer
room airconditioner
Information
technology
Power
Uninterruptible
distribution
power
unit
supply (UPS)
Switch/
gen
Lighting
Power use
Chart and data source: American Power Conversion Corporation (APC) white paper, Implementing Energy Efficient Data Centers, #114, by Neil Rasmussen, 2006.
PAGE 9
What the analysts predict …
Spending
(US$B)
Installed Base
(M Units)
$300
50
Power and cooling costs x8
 Today, across
industry 50
cents is spent
on energy for
every dollar
spend on
hardware.
$250
45
Server mgmt and admin costs x4
New server spending
40
35
$200
30
$150
25
20
$100
 This is
expected to
increase by
54% over the
next four years.
15
10
$50
5
$0
Source: IDC, Virtualization 2.0: The Next Phase in Customer Adoption, Doc #204904, Dec 2006
Source: IDC, Virtualization 2.0: The Next Phase in Customer Adoption, Doc #204904, Dec 2006
0
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Example: Managing environmental controls:
Warming the Data Centre to cool the Earth …
• Power
o
• A 3 C increase in data hall
temperature represented a
$300K pa reduction in electricity.
• Delivered upon double digit %
reduction in energy use 2 years
in a row.
• Using less now than 4 years
ago, but with more hardware
computing capacity installed.
• Water
• Current consumption only 20%
of that used 4 years ago.
• Reduced FY 06/07 water
consumption to only 47% of
FY 05/06 volume.
This equates to 1,000,000 litres
a year.
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… using innovation developed by the IAG team
• Enthusiastic team gathered to
innovate.
• Not just about saving energy –
Team is very aware of the finite
capacities of the Data Centre.
• Applying a longer term view to
business cases.
PAGE 12
Server Virtualisation assists with obtaining better utilisation
from the hardware platforms…
Used
Wasted
Mainframe
UNIX®
x86
PAGE 13
… but can often be justified against more immediate business
benefits …
• Improvements include
• Business agility & flexibility through speed to market
(reduce or even eliminate the procurement cycle)
• Real-time adjustment of workload sizing
• Improved Disaster Recovery capability
• Increased number of devices or capacity managed
per FTE resource
• Efficient use of Hardware & Software resources
• All whilst reduce the Carbon Footprint
• Less power usage directly improves upon IT carbon footprint
• But be aware
• Check software licensing terms before virtualising
• Ensure adequate operational training
• Consolidating 1:1 will not necessarily reduce software
maintenance effort
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Example: Server Virtualisation – reduce costs,
improve speed to market and green ...
• Challenges
• Data Centre capacity
• Aging equipment
• Limited time to migrate
• Minimal staff capacity
• Approach
• Investigation
• Virtualisation in Production
• Extending solution to DR
• Benefits
• Reduced physical server
numbers by 40%
• Corresponding financial saving
• Greater flexibility in provisioning
for new workload
PAGE 15
Example continued …. Storage Virtualisation
• Challenges
• Every increasing requirement for storage
• Approach
• Migrate all datacentre hosted storage to
Storage Area Network (SAN)
• Virtualise storage
• Benefits
• Isolation of server hardware from storage
hardware.
• Reduced vendor lock-in
• Less “wasted space”
• Enables IT Service Continuity & Business
recovery.
• Eases pain to migrate workload by
avoiding business outages.
PAGE 16
Pitching the case …
• Done properly, each initiative can be self-funding, using a traditional
ROI/TCO or your preferred financial model, so long as they are built
to consider the whole lifecycle of the assets.
• The examples given above, provided a financial return, assisting
with organisational sustainability, not just environmental
sustainability.
• In the last 12 months, CO2 emissions in our Australian
businesses have dropped by 18%, and we reduced our
electricity consumption by 14%, avoiding significant electricity
costs in an climate of rising energy prices.
“Green is the new Black”
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... translating to improved customer satisfaction & staff
morale, and reduced costs & business interruption
IT Spend
IT Spend
Business
Interruption
Business Interuption
(IT related)
Quarterly
400
350
300
250
200
150
100
50
0
FY02-03 FY 03-04 FY 04-05 FY 05-06 FY 06-07
IT Service Customer Satisfaction
Staff Engagement
70
60
50
40
30
20
10
0
2003
2004
2005
TS
2006
2007
2008
Target
IAG
PAGE 18
And so, in summary…
As insurers, we all work hard at assisting our customers in the aftermath of a natural disaster, and
IT certainly has a role to play here – but prevention is always better than cure.
Example: Newcastle Storms 2007.
 Satellite Communication equipped caravans
deployed directly into the affected areas around
Newcastle
 Live connection back to core IAG network,
providing Claims and Assessing access to all the
core applications, avoiding unnecessary paper
forms.
 Provided Voice over IP (VoIP) telephony
extensions with full IAG contact centre
functionality out to affected areas.
 Provided onsite IT support from day one
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