21 Nov 2007
The Wall Street Journal, November 21, 2007; Page A2
Original story
Michael Dell and Mark Hurd aren't big on save-the-planet rhetoric, but the bosses of Dell Inc. and Hewlett-Packard Co., respectively, are excited about their newest computers' energy savings.
Their message of focusing on lower costs and proven technology shows what big business can realistically achieve with environmental initiatives.
Instead of championing radical responses to high energy prices, their companies rely on constant tinkering with existing technology, knowing that prosaic efficiency gains add up.
Both executives talk about energy efficiency as if it were just another selling point for their customers -- which it is. They speak in terms of return on investment and payback periods.
"Whether you care about green as in the environment or green as in cash in your wallet, we've got something for you," Mr. Dell said during a visit to The Wall Street Journal last week. Some new products could pay for themselves in energy savings within a year, he said. "Customers love that. It's not a frou-frou discussion to them."
Public sentiment for so-called eco or green solutions to America's energy challenges has prompted makers of everything from gasoline to shampoo to portray themselves as environmentally conscious. Their campaigns might sound good in public-relations pitch meetings, but when slogans aren't backed up with action, they seem forced, even artificial.
This "greenwashing," with its brochures full of waving wheat stalks and Third World landscapes, often seems merely an attempt to disarm social critics.
By contrast, when major computer companies talk about energy savings, it's all about dollars. Mr. Dell cites his company's newest personal computers, which consume $23 a year in electricity versus as much as $100 a year for older models. Mr. Hurd talks about ways H-P has increased the computing power in its data centers 80% while trimming power-consumption costs 20% or more.
Taken in isolation, most of the energy-saving techniques used by Dell, H-P and others are hardly heroic. The manufacturers are putting more-energy-efficient fan parts in computers. They are making better use of computers' idle time. And they are lining up arrays of servers at customer sites so the exhausts flow in the same direction instead of having one machine's hot-air output become another one's intake.
Such pokey process improvements are how lots of industrial progress happens. In the computer industry, many of them were overdue. Companies spent most of their 1990s boom times improving computing muscle and speed without paying much heed to power issues.
Major computer customers began banging the table in 2005, demanding that manufacturers focus more on power consumption, says Charles O'Donnell, a power-and-cooling expert at the division of Emerson that helps corporate data centers manage resources. "It's among their top three concerns now," he said. "It used to be seventh or eighth."
Progress in other industries may be harder. Customers' spending cycles are far longer in sectors such as aviation, so even if jet-engine makers can offer 10% gains in fuel efficiency with their newest models, airlines may balk at unloading planes a mere five years into a 30-year life cycle to make room for something better.
Still, $98-a-barrel oil commands attention. Retail gasoline prices are up 38% in the past year, according to the federal Energy Information Administration, diesel prices have climbed 34% and aviation fuel has soared 59%. For anyone making products with motors, the impact of those price surges on customers is too big to ignore.
One of the best overall listening posts is Linear Technology Corp., which makes power-management devices for thousands of industrial customers. Don Paulus, head of Linear's power-business unit, said manufacturers of everything from marine engines to tractors have expressed interest in energy savings. "Most of them have never had any silicon in their products before," he said.
General Electric Co., which bet big a few years ago on environmentalism as a profitable business center, has plenty to smile about. Its Erie, Pa., locomotive unit is rolling out models for $2.5 million to $3 million apiece that could offer fuel savings of 5%, or as much as $100,000 a year per locomotive. GE says its Erie plant's inventory is sold out and the facility has a backlog of 1,000 to 1,500 locomotives.
Ironically, as energy-efficiency programs become a bigger chunk of companies' profits, it's likely we'll hear less rhetoric about them. Energy efficiency could become a major competitive battleground, full of trade secrets.
When the likes of Messrs. Hurd and Dell start waving off questions so that the competition won't catch on, that's when we'll know "green" initiatives are really paying off.
Write to George Anders at george.anders@wsj.com
Where Ecological and Economical Meet
By GEORGE ANDERSThe Wall Street Journal, November 21, 2007; Page A2
Original story
Michael Dell and Mark Hurd aren't big on save-the-planet rhetoric, but the bosses of Dell Inc. and Hewlett-Packard Co., respectively, are excited about their newest computers' energy savings.
Their message of focusing on lower costs and proven technology shows what big business can realistically achieve with environmental initiatives.
Instead of championing radical responses to high energy prices, their companies rely on constant tinkering with existing technology, knowing that prosaic efficiency gains add up.
Both executives talk about energy efficiency as if it were just another selling point for their customers -- which it is. They speak in terms of return on investment and payback periods.
"Whether you care about green as in the environment or green as in cash in your wallet, we've got something for you," Mr. Dell said during a visit to The Wall Street Journal last week. Some new products could pay for themselves in energy savings within a year, he said. "Customers love that. It's not a frou-frou discussion to them."
Public sentiment for so-called eco or green solutions to America's energy challenges has prompted makers of everything from gasoline to shampoo to portray themselves as environmentally conscious. Their campaigns might sound good in public-relations pitch meetings, but when slogans aren't backed up with action, they seem forced, even artificial.
This "greenwashing," with its brochures full of waving wheat stalks and Third World landscapes, often seems merely an attempt to disarm social critics.
By contrast, when major computer companies talk about energy savings, it's all about dollars. Mr. Dell cites his company's newest personal computers, which consume $23 a year in electricity versus as much as $100 a year for older models. Mr. Hurd talks about ways H-P has increased the computing power in its data centers 80% while trimming power-consumption costs 20% or more.
Taken in isolation, most of the energy-saving techniques used by Dell, H-P and others are hardly heroic. The manufacturers are putting more-energy-efficient fan parts in computers. They are making better use of computers' idle time. And they are lining up arrays of servers at customer sites so the exhausts flow in the same direction instead of having one machine's hot-air output become another one's intake.
Such pokey process improvements are how lots of industrial progress happens. In the computer industry, many of them were overdue. Companies spent most of their 1990s boom times improving computing muscle and speed without paying much heed to power issues.
Major computer customers began banging the table in 2005, demanding that manufacturers focus more on power consumption, says Charles O'Donnell, a power-and-cooling expert at the division of Emerson that helps corporate data centers manage resources. "It's among their top three concerns now," he said. "It used to be seventh or eighth."
Progress in other industries may be harder. Customers' spending cycles are far longer in sectors such as aviation, so even if jet-engine makers can offer 10% gains in fuel efficiency with their newest models, airlines may balk at unloading planes a mere five years into a 30-year life cycle to make room for something better.
Still, $98-a-barrel oil commands attention. Retail gasoline prices are up 38% in the past year, according to the federal Energy Information Administration, diesel prices have climbed 34% and aviation fuel has soared 59%. For anyone making products with motors, the impact of those price surges on customers is too big to ignore.
One of the best overall listening posts is Linear Technology Corp., which makes power-management devices for thousands of industrial customers. Don Paulus, head of Linear's power-business unit, said manufacturers of everything from marine engines to tractors have expressed interest in energy savings. "Most of them have never had any silicon in their products before," he said.
General Electric Co., which bet big a few years ago on environmentalism as a profitable business center, has plenty to smile about. Its Erie, Pa., locomotive unit is rolling out models for $2.5 million to $3 million apiece that could offer fuel savings of 5%, or as much as $100,000 a year per locomotive. GE says its Erie plant's inventory is sold out and the facility has a backlog of 1,000 to 1,500 locomotives.
Ironically, as energy-efficiency programs become a bigger chunk of companies' profits, it's likely we'll hear less rhetoric about them. Energy efficiency could become a major competitive battleground, full of trade secrets.
When the likes of Messrs. Hurd and Dell start waving off questions so that the competition won't catch on, that's when we'll know "green" initiatives are really paying off.
Write to George Anders at george.anders@wsj.com
Posted by Moderro.com / 21 Nov 2007
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