DX Has a New Endgame: Sustainability
- By Lachlan Colquhoun
- April 20, 2023
When organizations have embarked on their digital transformation journeys, they have been driven by the need for agility, a desire to control costs and the benefits of low latency and the cloud environment,
Increasingly, organizations today are adding another driver, and that is sustainability.
Their on-premises legacy systems and data centers are likely to contribute to their scope 1 and 2 emissions, but transferring much of this to an infrastructure and services provider can deliver significant reductions in emissions.
And many of these providers are well ahead on their net-zero journeys, meaning that the scope 3 emissions from engaging their service providers are usually significantly less than emissions generated in-house.
Top business priority
Anthony Ho, the director of regional product and platform at Equinix, says sustainability today is a common subject when he speaks with customers about digital transformation.
“We are starting to see more and more customers asking us, ‘apart from your data center, what else can I do to improve my sustainability through digital transformation?’” says Ho.
Sustainability is now a top business priority, says Ho, who points to a Global Tech Trends Survey, which showed that 56% of Hong Kong businesses cited sustainability as one of their organizations' most important drivers. 57% said they would work with IT partners who can meet key carbon reduction targets.
“They have very low costs, they can connect to the ecosystem very quickly, and they can also improve their sustainability and advance their journey to net zero”
At the same time, many organizations are finding that suppliers and collaborators in their supply chain are seeking contract amendments guaranteeing sustainability and renewable energy progress. Governments are increasingly mandating targets in areas such as building characteristics.
All this means a rapidly growing demand for environmental data, which doubled in 2022 after tripling in 2021. This is a revenue source in itself, representing over USD2 billion in global revenues.
More than the data center
There was a time, says Ho, when customers had little concern about what happened inside the data center once they had engaged a service provider like Equinix.
By moving to Equinix, they understood that they could immediately reduce their carbon emissions based on Equinix’s strong environmental performance, but now customers are asking more.
“Customers are asking, ‘can you give me a sustainability report? I want to know the temperature in the data center’.” he says.
Equinix itself has been on a rapid journey toward net zero and is advancing toward achieving some ambitious targets.
The company aims to have all its facilities 100% powered by renewable energy by 2030. In 2021, Equinix achieved 95% renewable energy coverage marking the fourth year it had reached this milestone, despite significant growth.
The company has been actively sourcing renewable energy supply for its global network of more than 245 data centers across 71 metropolitan locations. It has renewable power purchase agreements in place in the U.S., Finland and more recently in Spain, which will soon bring this contracted capacity to 595MW globally.
These investments are having an impact. From 2021, Equinix’s global Power Usage Effectiveness (PUE) improved by 5.5%, representing a substantial improvement.
Equinix fabric
Utilizing an Equinix data center powered by renewable energy, however, is often a first step for customers.
Ho says the next step on the transformation journey, Equinix Fabric, offers next-generation interconnection performance in real time. The ‘as a service’ nature enables organizations to adjust to real-world demands, which also helps reduce emissions further.
The fabric then enables clients to connect to major cloud providers worldwide, giving access to a global ecosystem of infrastructure and services.
“And once you offload some of your data to the cloud, we can see immediately that it is reducing CO2 emissions because you are leveraging the next generation network, and you don’t overpower your provision as you pay on the requirement,” says Ho.
As other organizations continue to focus on sustainability, Equinix is also continuing its initiatives.
For example, the company has issued around USD4.98 billion in green bonds and is one of the top global issuers. These funds are used in programs such as green buildings, renewable energy, water efficiency, waste reduction and clean transportation.
In 2021, Equinix joined European cloud infrastructure and data center providers to form the Climate Neutral Data Center Operator Pact. It helped develop a self-regulatory roadmap towards Climate Neutrality in Europe by 2030.
Growth challenge
In a practical sense, Equinix's infrastructure and the company’s sustainability commitments deliver strong results to customers.
Ho cites the example of one of Asia’s largest logistics providers facing a growth challenge.
Equinix helped them replace their legacy network with Equinix Fabric, relieving them of the need to maintain their equipment and giving them the power of a virtual network spun up in a few days.
“So this logistics company, they have definitely achieved the goal of being fast to market, and they can scale up and down,” says Ho.
“So they have very low costs, they can connect to the ecosystem very quickly, and they can also improve their sustainability and advance their journey to net zero.”
Lachlan Colquhoun is the Australia and New Zealand correspondent for CDOTrends and the NextGenConnectivity editor. He remains fascinated with how businesses reinvent themselves through digital technology to solve existing issues and change their entire business models. You can reach him at [email protected].
Image credit: iStockphoto/Velishchuk