Tuesday, 1 April 2008

Fear, Uncertainty and Doubt

I've mentioned in a previous blog that Green IT opportunity could be compared with Y2K, but without the end date. As many of you will know, Y2K produced unprecedented growth rates in the IT software and services markets.

However, in a meeting with another top 10 player last week I was also reminded that much of the expenditure at that time was based on fear of the unknown. As a result, the IT investments tended to be over the top and took a very long time to produce any return on investment (installing ERP being a good example).

This is a fear which will stalk the Green IT market in the next year or two. There is still a great deal that's unknown and uncertain about 'going green', e.g. forthcoming legislation, how to measure emissions (particularly supply chain issues), effective emissions reduction targets, how comparisons between companies will be made, carbon trading systems and costs, etc. As a result, some companies might delay action until it becomes clearer what should be done and how. The IT services player I was talking to also saw this as a reason not to jump on the green bandwagon and lead customers astray, but just promote solutions for greater business efficiency, which will often come with a green tinge.

I disagree with this approach, for two main reasons. Firstly, the IT market has come a long way since Y2K and IT is now much more closely integrated with business as a whole - companies are more cautious in their approach to IT investment. When they do adopt a green strategy it will be because of real pressure from customers, shareholders or legislation. Even if it's not that effective, shareholders and customers will want to see some action.

Secondly, IT services players need to point out the opportunities and lead the way. Much of the gains will be through innovative technology, or the innovative use of existing technology. A feedback I've received already is that customers want their IT suppliers to tell them what they should be doing. If you can't tell them they will go somewhere else.

Software and IT services (SITS) companies will have to tread a narrow path between offering green services and promising all the answers. Promising the earth (literally) but not delivering could well set back the market. What we do know is that we have to move quickly, so let's hope the uncertainty doesn't hold back actions.

© The Green IT Review

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