Verdiem switches on to IT energy management opportunity

BusinessGreen.com: How would you describe Verdiem's technology?
Kevin Klustner: We have developed technology for solving the problem of PC power management. PCs waste around two thirds of the energy they use and we have software to ensure they are switched to low power states or even turned off when they are not in use, cutting energy use by between 30 and 50 per cent.

How much demand are you seeing for the technology?
Our qualified customer pipeline has trebled in size in the last 12 months. These are strong customer leads who have agreed to an energy audit and are seriously thinking about this issue. We're also seeing more and more industry analysts who are looking at the area of green IT and all the leading equipment manufacturers are now focusing on building more energy efficient kit. There is a real sense that a green IT ecosystem is coming together.

Earlier this year you announced you were partnering with HP to install your software on some of their PCs. How is the partnership developing?
It's working really well. We announced that the software would be installed on HP's DC7800 high end corporate desktop earlier this year, and now it is on the mid-range DC5000 as well. We're in the process of undertaking joint customer calls in the US and are working to put together the strategy together for the UK.

What kind of savings can firms expect from Verdiem's software?
We are working with a law firm in the UK called Irwin Mitchell, which has rolled out the software to manage 2,500 PCs. They've recorded savings of £25 per PC per year, which is a total of £62,500 a year.

How much does the software cost?
It costs £15 per machine for a one time perpetual license, and then we charge 20 per cent of that each year for maintenance. We also do energy audits before we roll the software out so we can show demonstrable returns on investment (ROI) and the software contains reporting functionality so firms can continue to track those savings.

So, you claim to have a product that delivers savings of tens of thousands of pounds and generates a return on investment in significantly less than a year. Why doesn’t every firm have this type of software deployed already?
Awareness that there is a problem is perhaps the biggest barrier we face. Ask most people in IT what is the main user of energy and they will say the datacentre, but according to Gartner research the datacentre uses about 20 per cent of the energy the IT department uses, while PCs and monitors use 40 per cent. Because PCs are distributed right across the whole organisation people don't think about them, but they are a huge consumer of energy. Also, there is the issue of the cost savings typically going into a different department's budget. But that said, it is just a matter of time before this technology becomes a standard. It really is a no-brainer and it is also addressing the low hanging fruit when it comes to energy savings.

Where does the company go from here?
Our vision is to measure, monitor and manage CO2 emissions and energy use for all the IT devices in the corporation. We started with PCs and monitors because they have the biggest energy footprint, but we want to go further and manage the whole infrastructure, through laptops, printers, routers and switches. We are currently looking to build relationships with manufacturers in all these areas so that we'll finally be able to show companies how much energy their IT uses – at the moment they just don't know the answer to that question.

How big a technical challenge is it to develop that functionality?
The first component is to be able to detect the devices on the network and a lot of that work has already been done. Then you need to look at how to analyse the device's energy use, which is more complicated because at the moment a lot of the devices do not record that data, so you are initially likely to be reliant on algorithms and averages to calculate the energy use. The final phase, which is furthest off, is introducing intelligence into these devices so that they can be manipulated and even turned off automatically to save energy. That is where we will need close partnerships with the manufacturers. We are already working with several of those IT vendors that have made energy efficiency a priority and will be making some announcements in the summer about those partnerships.

What can customers expect as a result of these partnerships?
The net result will be a dashboard that shows the company how much energy is being consumed, where it is being wasted, how much money and carbon is being wasted as a result and where there are opportunities for efficiency. In the longer term, we'd be able to intelligently manage that infrastructure to ensure products are powered down or turned off when not in use. When you consider over 15 per cent of the electricity used by a non-manufacturing firm is used to power its IT equipment, we are talking sizable savings that can be realised. You will also be able to aggregate all that data and report on it, which means some firms may be able to monetise the system by selling carbon credits based on the energy saved.

Could you see this automated turn off functionality being extended into the datacentre? IT departments tend to get very twitchy about the idea of turning servers off.
The datacentre is a complex beast. The first step would be just to get the energy monitoring functionality in place and that would allow people to start thinking about energy, without sparking their fears about turning things off. But it is also worth remembering that we faced sceptics when we launched the PC software who said turning machines off would disrupt productivity and make it harder for the IT department to patch the machines. We developed functionality to deal with those issues and we'd expect to breakdown those same concerns about turning off servers in the datacentre.

What is the appeal to Verdiem of the UK market?
The UK is a great target market for us. It is home to plenty of Global 2000 headquarters, electricity prices are at least twice as high as in the US and climbing, and culturally there is huge interest in this topic with more and more businesses taking the issue of sustainability seriously. We are already operating over here now and will announce the opening of a UK office this summer.

About Kevin Klustner

Kevin Klustner is President and CEO of PC energy management software provider Verdiem Corporation.

Prior to joining Verdiem, Klustner was the Managing Director of Coastal Environmental Systems and President and CEO of Sightward, a venture backed software startup in Bellevue.

Klustner has also served as the Chief Operating Officer for PC network software company WRQ and held various management positions at Hewlett Packard.

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