Q&A: Dell CEO on Green IT

Technology company Dell is gaining attention for its environmental focus. To find out why, CIO’s Publisher Emeritus Gary Beach checked in with Michael Dell (via e-mail) on Dell’s green IT efforts and why environmental responsibility should be a number-one priority.

CIO: I found an AP article that says you instructed Dell engineers in 1992 to build a PC completely out of recyclable materials. Was that your green IT epiphany moment? Did the engineers complete the task?

Michael Dell: I had come to the realization as we produced more and more computers that the devices and products we sell have a defined life. If you’re producing, say, 1 million computers a year, it means a million computers are going to come out of circulation in another three to four years. What happens then? We can’t just make this piece of equipment someone else’s problem. Back in 1992, we said we wanted to have a completely recyclable chassis that didn’t have any adhesives or chemical compounds that couldn’t be recycled. We accomplished that goal, and continue to keep the environment in mind at every stage of a product’s life—from the point at which it’s designed and manufactured, through its use by consumers and finally to the point that it’s no longer usable.

In your keynote at the 2007 Consumer Electronics Show, you said Dell would be carbon neutral by the end of 2008. What does it mean to be carbon neutral and how close are you to achieving that goal?

We’re making great strides in this area. Carbon neutrality involves measuring greenhouse gases Dell emits through all of our activities, then implementing strategies to reduce and eliminate those emissions. There are a number of ways we hope to conserve energy and resources at all levels across our global operations. For instance, we now power our entire global headquarters campus in Round Rock, Texas, with 100 percent “green power,” including a mix of wind and methane-based energy sources. We’re also implementing a companywide power management program that automatically powers off machines at night when they’re not active. We’ve already saved $1.8 million and avoided 11,000 tons of CO2 through this initiative globally.

Dell is on track to becoming carbon neutral by the end of 2008. It’s also worth pointing out that to date we’re the only major computer company to commit to becoming carbon neutral. We believe it’s the right thing to do for our customers, employees and the Earth we share.

The Federal government, with mandates from The White House and the Electronic Product Environmental Assessment Tool (EPEAT) initiatives, is far ahead of the private sector in green IT. Will it take federal mandates to spur similar environmental actions in the private sector?

We are pretty cautious on mandates—sweeping regulations miss certain nuances that are pretty important. For example, some appliance-efficiency regulations look at one particular component of an electronic device, like the power supply. But dishwashers and refrigerators are quite different from servers and storage systems. They both have power supplies and they both plug into the grid, but comparing IT systems solely based on the efficiency of one particular component can ignore many other factors that drive energy use. For instance, the power and cooling of a data center can contribute to more than half of the electricity used. So trying to address these devices as if they’re similar is not the right answer. Mandates are not necessary where private action is incented by other forces. At Dell, as customer awareness of Energy Smart benefits has increased, we’ve introduced products to meet their needs from desktop to data center. So in some cases, the need for regulation to drive action is no longer necessary.

Green IT can certainly be grouped with corporate social responsibility initiatives. Milton Friedman, a famous 20th century economist, claimed “a business’s responsibility is to increase profits.” Robert Reich, former Secretary of Labor, says CSR is a “sideshow for most firms.” Can companies do both: be committed to CSR and to increasing profits?

There are countless benefits in being a company that does well by doing good. Take the environment, for example. A recent survey said 80 percent of customers consider it important that technology vendors have green offerings. And studies show that prospective employees rank “environmental awareness” among the top attributes they weigh when considering whether to work for a company. It’s important to our customers, employees, shareholders—and for our shared earth. So it’s important to us as a company. That’s why we launched Regeneration.org and offer free recycling to consumers worldwide, and why we’ve committed to be the greenest technology company on the planet.

We’re managing our business for true sustainability. That means attracting the best talent, protecting the environment and partnering with suppliers and customers to make impactful changes, from workplace policies to emissions reductions. Our partnership with RED is another good example of this. HIV affects our employees, customers, suppliers and communities worldwide, so it ultimately affects our business. By joining the (Product)Red campaign [which donates a percentage of product profits to help fight HIV/AIDS] we’re offering our customers some of our very best products, while we’re helping save lives in the fight against AIDS in Africa.

In a recent speech in Washington, D.C., to the Center for Strategic and International Studies, you said “there has never been a time in history, or business, where it has been more important for organizations of all sizes to partner together to positively impact the Earth that we all share.” That’s a very visionary statement. How do you see those partnerships working out? Who will drive them?

This is essentially about the whole being greater than the sum of its parts. When one organization makes a commitment, the ripple effect can be significant. But, when hundreds of organizations partner with government and customers, and each other, the effects are felt across continents. This is the philosophy that drives ReGeneration—people of all ages who care about the environment. We’re working to bring these people and organizations together to drive real change for planet—to build and sustain a low-carbon economy—and our customers are responding positively to our commitment.

In this globally extended enterprise world, how important are a firm’s supply chain partners in making the planet more green? What are you doing at Dell with your supply partners to make them more energy efficient?

Looking at our supply chain is one way to help manage our overall environmental impact. We require suppliers to be compliant with environmental standards defined by the Electronic Industry Code of Conduct (of which Dell was a founding member). One factor we measure our suppliers on is greenhouse gas emissions—we require our primary suppliers to report greenhouse gas emissions during quarterly business reviews. Good thing is that more than a decade ago, we taught our suppliers how to be more efficient in how they managed their inventory. It’s not too surprising that there’s a direct correlation between asset efficiency and how efficient you are with environmental resources.

A few months ago, we were the first IT company to join the Carbon Disclosure Project’s Supply Chain Leadership Collaboration. This provides suppliers with access to standard, globally recognized methodologies for reporting their carbon emissions. It offers our suppliers a more efficient tool for reporting their emissions and helps them avoid multiple reporting requirements.

Marks and Spencer, a British research firm, recently asked consumers to identify themselves as it pertains to environmentally friendly behavior. Eleven percent said they were crusaders, 27 percent said they were supporters if it was easy, 38 percent questioned that they could make a difference and 24 percent said they were uninterested. How do those results compare to what you’re seeing among enterprises?

Among the enterprise customers I talk to, I see a massive increase in interest, awareness and action around green IT. One CIO told me that his company has 4,000 terabytes of data, and it’s growing at about four terabytes per day. So how do they store it and manage it, and what is the cost to actually do this, and how much power will they require?

So our team has come up with some very creative ways of retooling a data center using virtualization and Energy Smart products, helping customers find a hidden data center in their existing space. We also recently introduced a new product that uses 19 percent less power than our competitor’s product while providing 29 percent better performance per watt. Benchmarks like those get the attention of any CIO dealing with exponentially more data to manage, but little to no more budget with which to do it. As another example, our energy-efficient OptiPlex desktops have saved our customers more than $2.37 billion in energy costs. We track the savings in real-time at Dell.com/earth.

Interestingly we give consumers the option of joining Plant a Tree for Me—one of our major green initiatives when they buy a computer. To date more than 100,000 have made a difference. And more than 130,000 have joined Regeneration.org. We also just hosted a competition on Facebook in which we invited people to draw what green means to them. There were more than 7,000 entrants and more than a million votes for the winner. Those are pretty incredible numbers.

Green IT often pits IT versus facilities. In that Center for Strategic and International Studies speech you said “IT and energy use are thought of as separate issues handled by IT and facilities…this is particularly worrisome.” Why so? And what can IT and facilities do to work better together?

IT and facilities are traditionally different departments with different objectives and different budgets. But, when you’re looking at reducing overall power consumption across an organization, both IT and facilities play a part. So working more collaboratively on addressing the issue will help drive better results. At Dell, we’ve built alliances with cooling companies who traditionally have relationships with facilities leaders. We already have relationships on the IT side of the house. By approaching customers together with a combined solution, we demonstrate how their data center energy consumption can drop by up to 45 percent while maintaining the same compute performance. It’s not as easy to achieve results like this if IT and facilities aren’t aligned.

Lets move to the front office and energy efficiency. Gartner analyst Chris Mines says “front office energy efficiency is a no-man’s land with dispersed assets shared by many departments.” How can CIOs handle this “no-man’s land” from a green IT perspective?

For the front office, you want to look for desktops and notebooks that meet Energy Star and EPEAT (Electronic Product Environmental Assessment Tool) criteria for energy efficiency and environmental friendliness. Systems with default power management settings make a big difference. Our Energy Smart business client systems, for example, ship from the factory with default power management settings that make it possible to reduce energy consumption up to almost 80 percent.

Power management software that monitors your internal client systems can also drive energy savings. It helps control the power state of PCs across your network and automatically powers off machines at night or during periods of inactivity. As I mentioned earlier, Dell is implementing our own companywide power management program. We estimate this will help reduce our energy costs by about $1.8 million annually.

One last question: Have you ever considered changing your blue logo to green?

Well, we do offer our Inspiron notebooks in Spring Green.