Are CIOs ready for the carbon tax?

The carbon tax is almost here but many CIOs are yet to get their head around what that means for their power costs and energy use.

With less than a month to go before the Federal Government's carbon tax bites, many chief information officers are yet to get their power house in order, a gathering of energy, ICT and data centre experts said yesterday.

Macquarie Telecom's managing director of its hosting business Aidan Tudehope said that, based on forward contracts the data centre owner has seen, energy costs will grow by 40 to 50 per cent over the next three years - well in advance of the average 10 per cent a year growth of consensus energy price forecasts.

That means a typical 3 kilowatt "green" or low-powered server rack that in the past year cost $8400 to power and cool will cost $12,000 a year in three years.

"For many businesses, that may still be below the radar, it may still be a rounding error in the P&L (profit and loss statement) but the question for the chief information officer is the chief financial officer is coming calling," Tudehope said.

"It's only a matter of time before he says, 'What the hell is happening in that computer room?' Increased reporting behind the carbon tax will get the CFO's attention."

Macquarie estimated there were 75,000 "captive" data centres in Australia, from a racks of servers and routers locked in cupboards to fully-fledged data centres owned by their users. Few of those would be carbon efficient, he said.

The telecoms company is about to unveil its $60 million green Intellicentre 2 data centre in North Ryde, about a half hour's journey from the Sydney CBD, that is highly power efficient using natural gas and the process of power generation to cool the centre to capitalise on the global moves to pricing CO2.

Tudehope said that from next month, the "cleanest, greenest" data centres will win the race for customers and he predicted that many self-owned and managed data centres would be decommissioned. Of those which remained, more would look to virtualisation technologies to eke the most efficiency from their infrastructure, he said.

Ovum analyst Steve Hodgkinson said CIOs had a narrow window of opportunity to reign in energy use.

"I suspect there are few CIOs in Australia yet accountable for the energy consumption of their ICT facilities and that's one of the most basic signals that drives behaviour around efficiency," Dr Hodgkinson said.

Companies should check if small print in their contracts allowed them to pass through costs related to the carbon tax or if it gave their suppliers that freedom, he said. But energy prices were rising irrespective of a carbon tax, he said.

He predicted many organisations will see it as further incentive to offload their data centres for public cloud facilities where they will be consumers of services. "The new style of IT is all about sourcing capabilities that already exist and using them quickly to drive innovation," he said.

Australia was in a growing company of countries pricing emissions and there would be consequences for rolling back the carbon arrangements should there be a change of government. "One way to look at it is as a terrible tax impost, but another way is to say, "Hang on, the whole world needs to go this way, these pills need to be swallowed at some point'.

"How bad would Australia's reputation internationally look if we made a significant reversal in a policy direction that was pursued by many other countries?"

Duncan Bennet, Australian managing director of roundtable host, VMware, pointed to an Hitachi study that found the ICT industry was as big a polluter as the airline industry, each responsible for 7 per cent of global carbon emissions annually. 

"It's a significant part of energy consumption worldwide and as such we have an economic and moral obligation to do something about it and that's a carbon footprint all the way through from the data centre to the desktop," said Bennet, whose software vendor of virtualisation technologies stands to gain from the implementation of a carbon tax as enterprises seek more energy efficient computing. 

And although most Australian businesses would evade a direct hit from the carbon tax, most would indirectly pay higher unit prices for power owing to the growth of devices in the enterprise, although many of these were more power efficient mobile devices than the desktops of just a few years ago they replaced.

Bennet said computing operations once performed on older mainframe computers were also making the move to the cloud.

"We're seeing a lot of the more traditional Unix workloads moving on to Intel x86 and consolidating in cloud providers, driven by massive capital expenditure savings in addition to green savings."