How to strike IT rich - a profile on Hewlett Packard
IT giant Hewlett Packard is looking into how climate change can boost its profits. Tom Idle met up with the company's environmental strategy manager, Zoe McMahon, to find out how the company is rapidly evolving
This is just one - albeit, in the grand scheme of things, a rather small - problem being solved by Hewlett Packard (HP) - manufacturer of all things IT, from printers and laptops to servers and scanners.
"Businesses don't quite know how much they are spending on printing and the waste they are incurring in the printing process," says environmental strategy manager Zoe McMahon. HP has introduced a solution called pool printing, where office users have an ID badge which needs to be swiped on the centralised printer in order to activate the print job.
The company has also started selling printers with set-ups pre-defaulted to carry out duplex printing (on both sides). "We did a pilot within HP implementing duplex printing," says Zoe. "The paper going through the process was reduced by 25%. We will roll this out across the whole business and I think we can save around 700 tonnes of paper."
It is this type of internal innovation and experimentation that has stood HP in good stead when developing environmentally responsible products for market. And what has driven this focus is HP's legacy of setting objectives for good business principles - something that began back in the mid 1950s.
The company has had recycling programmes in place since the 1980s, and design for the environment guidelines since 1992. "We take a business-focused approach - looking at this not as an isolated problem but a fundamental part of business and society."
Two years ago, HP's environmental team was readying itself for the introduction of the Waste Electrical and Electronic Equipment (WEEE) directive and the directive on the Restriction of Hazardous Substances (RoHS), ensuring that the business and those along the supply chain were able to cope with the impending legislation. Some of that work is still going on. And the Carbon Reduction Commitment (CRC), coming in 2010, has been added to the list of things to be aware of. But, while environmental issues have historically been a compliance topic for companies like HP, it is now a market issue.
Take the CRC for example. It will impact not only HP but plenty of its business customers too. "All of a sudden, 5,000 UK companies are going to have to be able to track and report their carbon data," says Zoe. "As an IT company, that's very interesting. We are starting to think how our systems can help them with their carbon goals.
"We are coming at it from a business angle as well as an environmental angle."
So it is not just about minimising its own impact on the environment (something, incidentally, it is doing very well indeed). HP is looking at how it can use the climate change agenda to grow its business. "Climate change represents a significant opportunity. IT can replace travel, for example. Electronic information flow instead of physical flow is better for the environment," adds Zoe.
And the interest in the environment that HP wants to see from its customers is most certainly coming through. Zoe went on maternity leave last year, and, in the nine months she was off, more changed than in the previous nine years, "just in the pace and interest from customers, and regulators and NGOs".
So, what is HP doing to satisfy this demand from its clients. Well, first up is Halo - a videoconferencing system. "It's phenomenal," Zoe says. "We are intending to quadruple our own internal use of Halo. The customers are buying into it too, and we are doing some research into the environmental benefits of videoconferencing.
"It's not a simple equation; it's not always the case that a video conference replaces international travel."
And this is a great example of how the company likes to use its own products in-house first to do some research, before taking it out to market and truly feeling comfortable talking about the environmental benefits of excellent technology like Halo.
Then there is the work being done on data centre consolidation. "Many of our customers are facing significant challenges in terms of the energy availability and cost to run their data centres.
"IT departments are being separately metered and companies are realising how much energy IT departments are using. We can now have conversations about how our technology can help - more efficient servers, devices being consolidated so you run more on less machines, and using less power." Listening to Zoe speak, one could be forgiven for thinking she was part of the sales team, not the environmental strategy unit. But that is a sign of how things have changed.
At HP's offices in central London, 86 data centres have been consolidated down to six. "Phenomenal process improvement can be made," says Zoe.
Data centres are a real problem. They are hugely energy intensive and it costs as much energy to cool a data centre as it does to run. To counter the problem, HP uses dynamic smart cooling. This is a network of sensors positioned in the server room that enable you to apply cooling only where you need it, as opposed to keeping the whole room cool. This can save up to 40% in energy costs. "Energy is a real problem," says Zoe. "My boss is in South Africa at the moment and they have to have power-outs all the time. For them, green IT is about energy provision. So it's important we come at it from a cost and business perspective, as well as an environmental perspective. Luckily they go hand in hand."
For the energy-conscious consumer, the Touch Smart PC is out now - a slimline computer, without a keyboard, and a touch screen for operation. It is more energy efficient, the packaging has been significantly reduced, and also because there is less weight to deliver the same function, there is what HP refers to as a "dematerialisation benefit" as well.
It has nothing to do with the environment but, according to the marketing office, HP is designing its products in a funkier and cooler way, tapping into the youth market that Apple has cornered for so long.
All this innovation is the product of HP Labs, the advanced research group for the company. "We invest a lot in HP Labs. They stimulate what we do, giving thought to the technology of the future. It is their job to think about what we can't afford to do - which is think about the next 20 years."
HP hopes the work of its Labs will provide the technology that will prove IT can be an enabler to climate change impacts. "There's obviously videoconferencing, but another example is smart metering - using IT to measure and manage energy better. Looking at ways that IT can actually help: that is the zeitgeist at the moment," says Zoe.
Elsewhere, the environment team is busy looking at the carbon footprint of its products, to keep the interested "advanced customers" appeased. Most customers are only interested in the footprint of a computer's use, for example. But there are some that want to go further back along the supply - a "tricky" undertaking, according to Zoe. "You question whether there is going to be much difference in the supply chain between a Dell PC and an HP PC. Arguably there might not be," she says.
"One of the challenges is how to measure things and what standards are underneath to allow customers to make a fair comparison. There is some work going on to develop standards to do that. So far, they have been focused on food and it's very easy to measure the carbon footprint of a yoghurt. But, if you take a laptop, it's a bit more complicated. Standards are needed in this space."
The business interest in how IT can be used to create a low-carbon operation will continue. But, as Zoe recognises, there could also be a potential for growth within the eco-conscious consumer market. Especially with the retail sector acting as an influential link. "The likes of Tesco are really pushing hard on environmental issues. They are committed to producing carbon footprint info on all their products, so they are now talking to us about our products they sell. Tesco is being the ambassador for the consumers, and it's this that will create the consumer interest."
As this issue of Sustainable Business went to press, British Gas announced a 35% price hike. What a better time for consumers to start being interested in how PCs could act as an energy management interface, allowing them to understand where energy is being wasted in the home. "In the home, IT isn't the biggest part of the problem," says Zoe. "But if you could link the IT to help manage the heating and lighting, then you are talking."
The IT sector has had its various challenges over the years. The latest is climate change. But, unlike so many other sectors, it is turning the agenda into a positive. And Hewlett Packard, with its continuous development programme, is future-proofing itself, while ensuring it plays a leading role in tackling the environmental impacts of its customers.
"This story is not over yet," says Zoe. "The maturity of the customer has a long way to go and there is more to come."