business value & ICT - Telecommunications - Green IT - Orange Business Live blog

The mobile industry is starting to get its act together on mobile broadband. Long plagued by acronym soup, the GSM Association, along with 16 of the world's biggest operators and IT companies, has taken a leaf out of the Wi-Fi Alliance's book and launched a 'sticker' scheme for mobile broadband. Instead of users trying to work out whether they can get UMTS, 3G, HSPA or Turbo 3G, they just use equipment bearing the 'mobile broadband' service mark and know that they can connect to mobile broadband services.

The scheme will see communications technology preinstalled and preconfigured in laptops bearing the mobile broadband mark that will be ready to switch on and connect straight out of the box. To bear the mark, the device will need to offer fast mobile network connectivity from the GSM family of HSPA and above, including HSPA Evolved and LTE (here they go again with the acronym soup!). And the scheme is not limited to laptops, with the GSMA perhaps fancifully saying that the mark can be extended to deliver wireless broadband access to devices ranging from cameras to MP3 players; the only proviso is that the devices are fully mobile.

This is definitely a positive move for driving the uptake of mobile broadband, and it is clearly aimed squarely at 'stealing' business away from Wi-Fi hotspots. In fact the press release rather pompously intones that: "While there will always be a place for Wi-Fi connectivity, the great merit of Mobile Broadband might be that it liberates the user from the spatial tyranny of the so-called 'hotspot.'" According to figures from Wireless Intelligence, more than 55 million people already subscribe to Mobile Broadband services in 91 countries, with more than 4 million more users per month joining the party.

Of course, eliminating user confusion is only part of the barrier to mobile broadband uptake. Cost is still an issue, in particular when users roam to different countries. There are countless tales of execs being presented with massive bills for mobile data roaming when they travel, which makes businesses look towards the more predictably priced Wi-Fi hotspots. Luckily data roaming costs are already coming down as the industry reacts both to threatened regulation and market pressures and some operators are already speaking about driving international rates at wholesale level as low as €0.25 per megabyte. Rates as low as these will undoubtedly make mobile broadband attractive and cement GSM's position as the leading access technology.

Orange is extending its footprint in Africa, one of the world’s fastest growing telecoms markets. France Telecom has announced that it will be launching a nationwide GSM network in Kenya, following the acquisition of a majority shareholding in incumbent operator Telecom Kenya. This is the fourth nationwide GSM network in Kenya, and both mobile and fixed networks will be branded Orange. The launch of cellular services means Orange becomes Kenya’s first fully integrated fixed line, mobile and Internet provider.

Kenya, located in East Africa and home to 37 million people is an important regional hub for trade and finance. The government has been targeting inward investment, particular in the form of offshore outsourcing. To support the move into the hi-tech service economy, communications with the rest of the world are receiving a boost. For instance, sub-sea cables are being laid to the United Arab Emirates and the East Africa Submarine Cable System will link East and Southern Africa to the rest of the world.

Like many African countries, mobile communications dominate fixed line. There are around 12 million mobile subscribers in Kenya, about a one-third market penetration, so while growing rapidly, there is plenty of room for further growth. Fixed wireless services are also doing well; Orange Kenya has around 200,000 subscribers to its limited mobility CDMA service. This brings mobile networks to rural villages but does not supporting roaming between cells so it’s a bit like supercharged DECT. Enterprises will be interested to know that there is also significant investment in nationwide backbones and WiMAX access networks. So with lots of competition between operators, investment in new networks, there’s ample evidence that Kenya has become of the continents most dynamic telecom markets.

Orange’s $390m purchase of a controlling interest in Telecom Kenya, Kenya’s largest operator, last year, is proof that Africa remains high on FT’s overall strategy. FT Group has a major commitment to developing fixed and mobile services, particularly helping incumbent operators make the transition to full market liberalization. FT also operates networks in Botswana, Cameroon, Central African Republic, Egypt, Equatorial Guinea, Republic of Guinea, Guinea Bissau, Ivory Coast, Madagascar, Mali, Niger and Senegal. In each case, Orange is helping to modernize existing networks, and build out mobile and wireless networks in underserved locations. In Ivory Coast, for instance, Orange Business Services has built a Metro Ethernet network to support Cote D’Ivoire Telecom’s enterprise customers. This could well be the first all-optical backbone of its kind in Africa.

Everyone knows the statistics published by Gartner in 2007: the Information & Communication Technology (ICT) industry represents 2% of total CO2 emissions, which is as much as the whole airline industry. ICT can be seen as a bad sustainable development (SD) citizen in many ways: large data centers are consuming as much energy as small towns, the ICT industry produces hundred millions of devices every year, including laptops, routers, PDAs or cell phones, with a lifetime of between two and five years, and very little is done to collect the used devices and recycle them. On top of this,  uncertainties regarding microwaves' effect on the brain make people think it is dangerous to  use mobile telephony extensively. Should we therefore consider that a sustainable world would be a world where ICT has finally disappeared ?

Of course nobody’s perfect, and some of the criticisms leveled at ICT have an element of truth. The question of the power consumed by data centers is valid, the number of devices is increasing faster than the world’s economic growth rate and the question of microwaves is still on the table, even if nothing has been proved so far.

But is the glass half full, or half empty?

Let’s take the statistics the other way around. If ICT is producing 2% of total CO2 emissions, it means that other industries are generating the other 98%. And the good news is that ICT can help reduce this 98%, by enabling green business practices throughout the enterprise and initiating business innovation. In July 2008 the Climate Group estimated that ICT could reduce CO2 emissions by more than five times its own footprint at that time: a massive 15% of total CO2 emissions!

How is this possible? Because ICT is a ‘soft’, i.e. dematerialized technology, it can compete effectively with ‘hard’ technologies that need to move thousands of tons of steel and other materials to get things done. Cars, trucks and airplanes are made from tons of metals and plastics, use tons of oil to work, and generate tons of CO2.

The most common course of action is to reduce travel by using videoconferencing and other remote collaboration tools. Instant messaging, unified communications, document sharing, video and web conferencing generate three benefits: they save cost, reduce CO2 emissions, and improve work-life balance and team spirit. And from this we can write the universal law of successful ‘green’ products: a ‘green’ service needs to deliver at least three benefits: cost saving (short ROI or TCO reduction), an environmental or social benefit and a third one, such as work-life balance, improved employee productivity or reduced executive stress and fatigue.

There are plenty of other ideas we can implement to reduce travel: telecommuting solutions for home workers, managing a fleet of vehicles to optimize itineraries and minimize gas consumption, telemonitoring, telemaintenance, automatic reordering of vending machines, etc.

But this isn't the only avenue: virtualization and grid computing can make the huge power-hungry data centers that are so difficult to cool down obsolete. And virtualization has another benefit: it allows people to work remotely with any terminal. You don't need to reorder a new PC every two years, and you can work from anywhere. This provides four benefits: TCO reduction, CO2 emissions reduction, better work-life balance and reduced of electronic waste.

Other avenues include the social dimension of sustainable development. Remote monitoring technology allows older people to be monitored and treated at home without needing to leave their friendly environment for an inhuman hospital. Again three benefits: cheaper healthcare, happier patients and better for the planet.

We can multiply the examples: RFID in supply chains, NFC for micro-payments and video for remote access to public services in rural areas. The potential to leverage ICT for sustainable development is limitless, and I tend to agree with the statement of the Climate Group that ICT can reduce total CO2 emissions by 15%!

But this shouldn't stop IT and telecoms firms from drinking their own champagne and keeping their house in order. We can drastically reduce our own CO2 footprint, better process our electronic waste and continue to address the question of the impact of microwaves on human beings’ health. Acting like this will make ICT the a ‘good guy’ in sustainable development, and build a better world where the ‘soft’ replaces the ‘hard’ as often as possible.

In part 1 of this article on the business benefits of Web conferencing we have established that there is a business case for productivity with regard to the use of web conferencing at least in the sales department and also in the training department.  in part 2, with the help of Frost & Sullivan and WebEx, we found out that we were even able to underpin those conclusions with facts and figures.  As we concluded in this latter part of the article, the expected results in terms of productivity and return on investment, can be impressive.  In part 3 of this article - i.e. this one - we would like to stress a few points so as to delve deeper into the analysis of those numbers.

There are indeed - despite the undeniable quality of this document - a few grey areas which need to be underlined if we wish to refine our analysis of the Web conferencing ROI.

First and foremost, the examples set forth in this ROI calculation White Paper are high-tech examples, essentially with companies based in the United States. Secondly, the assumptions made in this document with regard to the investment of time savings into work (the so-called correction factor) are rather subjective and may even be deemed to lack transparency to a certain extent (see page 10 of the whitepaper  for details).  Results can indeed vary greatly according to enterprise size, staff Internet literacy, and also the location of a business. Thirdly, whereas a systematic increase in productivity through the replacement of physical meetings with remote conferencing is mentioned, there are still many cases in which face-to-face meetings are bound to be more efficient and we cannot entirely rule them out altogether. At least, it wouldn't yet seem feasible to me just now, and certainly not with regard to sales related meetings.  Fourthly, the lack of representativeness of the sample (as in example 1 and 2, only a single company is investigated in this study) and the lack of historical data can actually cast a few doubts on this ROI exercise.  Lastly, the fact that many a number are originating from the editor itself, could also lead a few people to doubt the numbers are right.

All the above items not mentioned in a negative way but rather as so many hints as to the potential improvement of an ROI calculation for web conferencing.

Eventually, one could also wonder whether the sheer importance of these numbers in terms of productivity, and percentages for the return on investment of web conferencing are indeed instrumental in making the story more plausible or on the contrary is instrumental in raising doubts in the minds of those who oppose the further development of web conferencing (what does a 465% increase in productivity mean? Can anyone believe in such an impressive number? Does it mean each of us can work 4.65 times more than we ordinarily do?)

What prompts these musings about how related the ROI for web conferencing is is in fact the hindsight which I have derived from the time spent on such subjects  since the first implementation of web conferencing at Orange at the beginning of the year 2001.  More than seven years later, I'm still impressed by the margin for improvement with regard to the pervasiveness of web conferencing, throughout Europe at least.  Most business people know what it is, but there are still quite a few managers who are discovering the tool for the first time.  As I am an intensive user and promoter of this kind of technology I do believe that the ROI numbers showed, at least in principle, are true and apply more or less to all sales & services related activities as well as internal and external communications.  However, I doubt that most people would believe that these numbers are right.  Only intensive and highly productive users who have become so Internet savvy and au fait with web conferencing services would actually relate to these numbers.

This is part two of our article on web conferencing ROI based on the Frost & Sullivan and WebEx document dedicated to the return on investment for web conferencing services. In part one of this article, we have established that the main benefits which can be derived from web conferencing are not forcibly those that seemed obvious at first sight.  The prominence of the productivity factor is obvious.

However, one still has to build a business case around that and try and estimate how much productivity can be derived from the usage of this ICT tool, and what impact it can have on either sales, profits, or even other business factors such as the investment of this productive time into other activities which in turn can generate either more revenue and profits or even lead to a leaner organisation. 

Amongst the qualitative benefits which were uncovered by Frost & Sullivan and WebEx in the White Paper, we can actually list:

• time savings implied by the reduction in travel,
• positive impact on CO2 emissions,
• improved communications between employees and partners in an ever increasingly globalised world where the workforce is scattered around the globe,
• faster decisions and improved results

over and above all these qualitative benefits we have already established (see part one of this article) that the most important factor was productivity.  But how can we measure this properly and put numbers behind this assumption? Frost & Sullivan did carry out a survey - on behalf of WebEx - of the activity of a given WebEx customer (in fact a Fortune 500 client in the high-tech sector) and even zoomed in on one of its department; the most obvious choice for this study was the sales department.  Indeed, web conferencing is often used by salespeople in order to present and even trigger live product demos remotely (at least in this particular vertical) even before they have organised a face-to-face meeting with a potential client (as a matter of fact, I have established over time that web conferencing is most powerful when applied to the qualification of a prospective customer. Whereas face-to-face interaction is required at some stage of the sales process, remote presentations can actually save time and money on the qualification process so that the sales person actually focuses only on those clients are well worth a visit).

This Fortune 500 companies no small fry.  $250 million in revenues per annum and a handsome 35% gross margin figure, but it's not a big fish either. With only 250 employees, Frost have targeted a mid-tier player with exceptionally high productivity per employee ($1 million revenue per employee p.a.). Frost then went on analysing this ROI by breaking it down into three distinctive, nested benefits (see chart 1.3)

All the talk about green IT is confusing people, says analyst Gartner. CIOs have become so overwhelmed by the mass of information available from vendors, conferences and marketing that they are no longer sure which technologies are relevant to them, when they are available or which ones they should invest in. To help enterprises navigate these turbid waters, the analyst has suggested a three-phase plan to take businesses through immediate green IT action, mid-term planning and long-term strategy.

Phase 1: the immediate issues that enterprises should focus on are:
1. Modern data center facilities' design concepts
2. Advanced cooling technologies, such as IBM’s work on water cooling shown in this video.
3. Use of modeling and monitoring software
4. Virtualization technologies for server consolidation, which VMware says could save enterprises 80% of their energy costs
5. Processor design and server efficiency
6. Energy management for the office environment
7. Integrated energy management for the software environment
8. Combined heat and power, which allows companies to use the heat generated in electricity that is normally wasted, as explained by Greenpeace

Phase 2: the mid-term phase of the plan should look at the next two to five years when many green technologies will have become mature and enterprise can build on what they have done in phase 1. Issues to focus on should include:
1. Green IT procurement, such as already being practiced by the European Union
2. Green asset life cycle programs
3. Environmental labeling of servers and other devices
4. Videoconferencing, for example telepresence has helped Cisco save $103 million in travel avoidance according to a study by Wainhouse Research
5. Changing people's behaviors
6. Green accounting in IT
7. Green legislation in data centers
8. Corporate social responsibility (CSR) and IT programs

Phase 3: in the longer-term enterprise green IT strategies need to encompass:
1. Carbon offsetting and carbon trading, which was worth $64 billion in 2007 according to the World Bank
2. Data center heat recycling, such as the project being worked on by Intel
3. Alternative energy sources
4. Software efficiency
5. Green building design
6. Green legislation
7. Green chargeback

These are the steps that Gartner recommends. Do they chime with your strategy? Please use the comments form below to share what action you are taking to make your IT greener.

it's not just GREEN IT ...

It's not just with Green IT that ROI calculations are a must. Conferencing is very much at the centre of most discussions on that topic at the moment. I believe that Cisco's much touted launch of its new telepresence system a couple of years ago has been very instrumental in putting conferencing - and video conferencing in particular - on top of the business agenda. The recent interest in environmental issues  (as in our new CO2 saving tool)  - no longer disconnected from business - has also triggered an outstanding revival in the conferencing market. Similarly, the accelerating pace of globalisation and the fact that business teams are now increasingly scattered across different regions is no longer a subject for the likes of Charles Handy (who warned us more than 13 years ago that virtual organisations were our future) but a reality that almost all knowledge employees have to live with and a potential opportunity that the most nimble of us can leverage. No doubt then that the demand for conferencing tools is rising.

working in the global village

My extended team is made of people reporting to all parts of the organisation. One of them is in Virginia, another is an American based in the UAE, most others are based in the UK and France, not to mention all our counterparts from regional Marketing teams, and namely the EMEA Marketing teams based in Germany and the Nordics. This reality is certainly one that many a manager reading this blog will not only understand but relate to. How on earth do you get all these people to work together without audio and web conferening? And I'm not even mentioning virtual meetings with clients. To us there is no question that we need these tools to do business. Still, that doesn't mean we shouldn't try and measure the return on investment for such tools, be it to justify one's investment or even just to better understand the benefits which can be derived from the use of such tools.

A green baseline is critical if IT leaders want to transform their IT estate, reckons analyst Forrester. Its new report, “Is Green IT Your Emperor with No Clothes?” argues that what you can’t control you can’t measure. In other words, if you don’t know how much power a PC consumes, or what the cooling costs are for your data centre, you will struggle to create a strategic plan to reduce the footprint of either.

The analyst asserts that IT leaders must drive the green agenda forward and cannot rely upon vendors. They must inventory IT assets, estimate their annual energy consumption and CO2 emissions, and estimate the costs of operating all the equipment.

An inventory is a good idea: it will let you know if your data centers are optimized and how many laptops sit unused. Once all the switches, routers, servers, printers and so on have been catalogued, you can estimate their energy consumption from the faceplate or ask the vendor directly. Use of PC power management software can tell you how long the PCs have been on and it’s simple enough to track the usage of printers. The equation is pretty straightforward:

(Number of assets) x (Energy draw, in kW, per asset) x (Annual uptime per asset, in hours) = Annual energy draw in kWh

Gather these figures together and you will have a Power Usage Effectiveness (PUE) and Data Centre Infrastructure Efficiency (DCIE), the figures promoted by the Green Grid for gauging data centre efficiency. Only when you have a baseline for IT energy efficiency can you create a plan for increasing the efficiency with tangible results. The kind that finance directors like to hear.

There is an interesting article on creating a green IT baseline here:
http://weblog.infoworld.com/sustainableit/archives/2008/09/green_it_baseli.html
and you can find the Forrester report here: http://www.forrester.com/Research/Document/Excerpt/0,7211,46597,00.html