Telecom's 40 Shades of Green

Polaris Venture Partners’ Bob Metcalfe

So perhaps it’s no wonder that global warming is becoming a movement, from Al Gore to Leonardo DiCaprio to the popularity of the Prius, and Delta Airlines’ corporate recycling program for all those cans and bottles flight attendants hand out. Collectively and across party lines, industries and individuals alike are taking action, and the telecom industry, always an innovator, is playing a role, too. Or rather, many roles, as it were — from recycling to power reduction. Call it telecom’s 40 shades of green.

Bob Metcalfe, inventor of Ethernet and founder of 3Com Corp., who’s now a venture capitalist, says telecom will provide the underpinning for sustainable energy sources, analogous to the networking technologies he has helped to pioneer. “The ‘Enernet’ is what we all are now building, to meet the world’s accelerating needs for cheap and clean energy,” he says. “I call it the Enernet to make what I think is a fruitful analogy with the Internet. The Enernet, like the Internet, will use computers. It will be distributed. It will have layers and standards among the layers for accelerating progress independently and in parallel. The Enernet will be built not by climate change activists or, well, Al Gore, but by scientists, engineers, entrepreneurs and venture capitalists. The best science for the Enernet will be done at universities, please.”

Put simply, Metcalfe’s Enernet is a standardized, networked web for the distribution of energy, much as the Internet distributes information. Energy will become cleaner and cheaper as more people, endpoints and technologies get networked in, and telecom will be a key part of it. In fact, he says Metcalfe’s Law, first conceived to explain Ethernet, can be applied to the Enernet, whether relating it to wind power or one of the many biofuel options. As a refresher, Metcalfe’s Law says that the value of a telecom network is proportional to the square of the number of users of the system; the more distributed users there are on the system, the greater the value of the network and of those endpoints themselves. In other words, it describes a blueprint for an explosion of growth, and explains many networking phenomena we have today, from the Web to social networking. Standards+Metcalfe’s Law = efficient, sustainable, viral, organic networking growth.

Metcalfe’s vision is playing out as several telecom companies are working on going green through the creation and efficient use of energy and resources. BetterWorld Telecom LLC is the first carbon-neutral carrier in the United States, it claims, using wireless, unified communications and VoIP to reduce its infrastructure and energy requirements. It also will eliminate paper billing by the end of 2007, uses a Web-based, paperless back-office system, as well as 100 percent recycled paper when necessary. BetterWorld gives 3 percent of its revenue to causes that benefit children, education and the environment, with a goal of donating $1 million per year by 2012.

Vendors also are where a lot of the green action has been. Solis Energy, for example, has created a solar generator for Wi-Fi routers to take them off the grid, and has disaster recovery systems for municipal Wi-Fi projects. The systems don’t require a hook-up to wired infrastructure, as they run on batteries and solar panels, which makes them a cost-effective option for remote areas, as well.

Ericsson's green base station promises to reduce carbon emissions by 30 percent.

Large vendors are getting in on the act, too. Ericsson has unveiled a radio base station site concept, the Ericsson Tower Tube, designed by renowned Scandinavian architect Thomas Sandell. It has the capacity to reduce energy consumption in wireless towers by 40 percent, especially since no active cooling is required. The 5-meter by 40-meter concrete tower encapsulates all radio base station equipment, including antennas, and takes up 60 to 75 percent less real estate than conventional sites. It puts out 30 percent less carbon dioxide emissions during production and transportation, and as a self-contained structure, operators can avoid the need for security fences and the cost and carbon footprint of sending out trucks to maintain and patrol them.

IBM Corp. is going green as well, and has pledged to redirect $1 billion per year across its businesses, mobilizing the company’s resources to dramatically increase the level of energy efficiency in IT. The “Big Green Innovation” plan includes new products and services for IBM and its clients to sharply reduce data center energy consumption, which is a topic at top of mind for those who operate data centers (see “Slowing the Data Center Drain” sidebar below).

Then there’s the problem of household energy consumption, particularly those so-called “vampire” devices, like DVD players, which are on all the time, slowly sucking energy. Consumer devices are likely to proliferate as wireless access becomes more prevalent and IPTV/home gateway and fixed-mobile convergence strategies continue to roll out from service providers. Even now, consumer electronics devices account for as much as 5 percent of an average household’s energy consumption, according to the Environmental Protection Agency (EPA).

However, simply putting those devices into sleep mode could save more than 80 percent of that expense and cut carbon dioxide emissions by up to 1,250 pounds per year, according to the agency. Accordingly, companies like NDS Ltd. are pledging to reduce the power consumption of set-top boxes and DVRs. A first initiative by NDS is an Auto Standby solution, which automatically switches inactive devices that standby mode overnight. The standby consumption of an STB has been estimated to be 10 Watts. If this figure is multiplied by the 500 million digital set-top devices that are projected to be deployed over the next five years, it will save the equivalent carbon emissions of five super power stations. “Currently, an HD DVR can use as much power as a domestic refrigerator, and we want to address this,” says James Field, NDS’ director of technology and new initiatives at NDS.

Reducing the household energy load is something overtaxed utility companies are interested in too, with new models emerging around allowing the use of smart meters, which can ensure some devices are used only at certain times of day, in return for subscribers realizing decreases in the monthly bills. It is the communications service providers like telcos, cablecos and utilities that can provide powerline communications, smart home networking/home gateways and/or short-range wireless networking technologies like ZigBee with distributed intelligence to enable such energy-efficient homes. Add in machine-to-machine telematics via wireless for reading meters and sending info back to HQ, and the green business case becomes even better.

Several energy companies are conducting pilots using BPL or wireless technologies to enable such schemes. For example, EnerNOC Inc., an energy management conglomerate, works with energy companies to improve their technological efficiencies. CenterPoint Energy Inc. in Houston is expecting a commercial rollout with ZigBee in 2008, and Southern California Edison is currently in smart meter trials with Zigbee.

Another part of the equation is the endpoints themselves. To that end, Google, Intel Corp. and several PC companies have launched the Climate Savers Computing Initiative, which focuses on the components that convert AC power from a wall socket to the DC power used by a computer. As much as 50 percent of the power being converted evaporates, either becoming heat dissipated or just never used; thus, the goal of the initiative is to increase the components’ efficiency by more than 90 percent, in a cost-efficient manner. If PCs and servers become at least 90 percent efficient by 2010, the amount of electricity saved will eliminate 54 million tons of carbon dioxide, according to the collective.

Then there’s the issue of the materials actually used in consumer electronics gear. That became a high-profile issue recently when Greenpeace sued Apple Inc., saying there are toxic compounds in the iPhone’s antenna and headphone cable coating. Plus, the device’s battery is glued and soldered in the handset, making it difficult to recycle the phone. In May, Apple’s CEO Steve Jobs pledged the company would become greener, eliminating the use of hazardous chemicals from its products.

Through these efforts across a wide spectrum of initiatives, Metcalfe says, the world will see a networking effect, becoming greener while business benefits. It will be an ongoing process, he notes. “The Internet took 50 years to build if you go back to Sputnik in 1957 as a precipitating event,” he says. “So, no, the Enernet is not a Manhattan Project — we have 50 years to build it.” But there are caveats: “There are monopolies to break, like AT&T and IBM were in the 1960s, and monopolies do not give up easily,” he explains. “We need to be careful trying to make energy with government policy — politicians try to win the last war, and the machinery of lawmaking is in the hands of the status quo’s lobbyists.” Also, the Enernet will play out with many surprises, including bubbles, such as the Internet bubble of the 1990s. “Making bubbles illegal, like a lot of people want to do now, if it were possible, would only slow innovation,” he says. “The trick is not to be a loser when the bubbles burst.”

The bottom line? “Let’s build the Enernet like we built the Internet, to sustain growing prosperity in the world, to improve national security by not mailing billions of dollars to people trying to kill us, and to reduce pollution including CO²,” Metcalfe advises.

Investing Environmentally
By Kelly M. Teal

The concept of going green has gotten a lot of attention over the past year, and not surprisingly, private investment in so-called clean technology rose during the third quarter of 2007, with one deal ringing up $100 million, according to the National Venture Capital Association (NVCA) in October’s MoneyTree Report. The activity not only validates green technology as a profitable approach to business, it also legitimizes efforts on the part of such people as Bob Metcalfe, John Doerr, Steve Case and Bill Gates, all early investors in the green tech movement.

The MoneyTree Report considers the clean tech sector to be comprised of alternative energy, pollution and recycling, and power supplies and conservation. Because that’s such a broad definition, the designations crisscross industries, including telecom and Internet. As a whole, clean technology in the third quarter received more money than it ever had before, although software and biotechnology remained the top-funded industries in 2007’s third quarter. Such confidence demonstrates clean tech’s viability, says Tracy Lefteroff, global managing partner of the venture capital practice for PricewaterhouseCoopers, a financial advisory firm. She adds that clean tech produced three of the top five deals this quarter. Overall, $844 million went into 62 total transactions, according to the MoneyTree Report (produced by PricewaterhouseCoopers and the NVCA with data from Thomson Financial). That represents an 80 percent increase in the dollar level, and a 35 percent increase in the number of deals, in the clean tech sector as compared to the second quarter of 2007, the report shows.

While Al Gore’s “An Inconvenient Truth” seemed to popularize the idea of green, several tech visionaries already were on the bandwagon. For example, last year Microsoft Corp.’s founder Bill Gates promised to pay a California company $84 million to build five ethanol bio-refineries. Steve Case, founder of AOL, a year earlier started Revolution LLC, an investment firm that works with companies promoting sustainability. Also in 2006, John Doerr, one of the early investors in Google and Amazon.com, set up a $100 million fund to invest in green technology. Perhaps most notably, though, is Bob Metcalfe’s work to support clean companies. The Ethernet inventor and 3Com Corp. founder has worked as a general partner at Polaris Venture Partners since 2001, focusing on IT startups. He also has served as interim CEO of GreenFuel Technologies Corp. since this summer. (Cambridge, Mass.-based GreenFuel recycles carbon dioxide from flue gases to produce biofuels and feed.)

GreenFuel right now is Polaris and Metcalfe’s first green tech investment, but they are pursuing the sector heavily. Metcalfe is a relative newcomer to the energy aspect of technology, but green technology now is one of his top pursuits.

There has been skepticism for some time as to whether going green results in ROI. Some insiders say the trend is just another marketing ploy to get people to spend money. But one service provider, BetterWorld Telecom LLC, apparently has been so successful that its founder was able to start its own venture capital firm to fund socially responsible investments. BetterWorld, which declined requests for an interview, bills itself as the first carbon-neutral service provider. Its clients include Patagonia Clothing Co., Seventh Generation, Green Mountain Coffee and the National Peace Corps.

BetterWorld’s venture capital arm is Working Excellence Capital Partners. It finances emerging companies in Internet communications and content, networking and communications infrastructure, e-commerce and more. Portfolio companies generally get investments between $600,000 and $5.5 million. Initial capital commitments range from $100,000 to $1 million, while secondary investments get $500,000 to $2 million.

Indeed, such momentum highlights why green tech received such a funding boost in 2007.

One of the ways the telecom industry is going green is by enabling carbon-neutral collaborative communications, like online conferencing and video applications, along with unified communications packages that let people do their jobs productively without traveling to the office to perform basic corporate functions. Yesterday’s argument that conferencing cuts down on travel and saves money has yielded to today’s notion that the services cut down on travel and save the environment.

According to carbon-offset organization Trees for the Future, one passenger flying on a typical 250-seat passenger jet generates one pound of carbon dioxide every two miles. On a flight across the United States (about 3,000 miles), a passenger puts out about 1,500 pounds of the stuff. That takes about 30 trees to offset that extra carbon dioxide. That’s not to mention emissions from rental cars and the environmental impact of hotels.

Enter conferencing and long-distance collaboration.

Video conferencing leader TANDBERG, for instance, touts its products as coming to the rescue. “For companies to go green, they need solutions that positively impact the environment without raising costs or sacrificing productivity,” says the company’s green mission statement. “For TANDBERG and our customers, that means using our video conferencing solution to reduce unnecessary travel and provide effective telecommuting options. It’s this simple: staying off the roads and out of the skies means adding less CO² to the atmosphere.” The vendor runs a green-focused site, www.seegreennow.com, with carbon calculators, quizzes and environmental pledges.

AT&T Inc. is among those companies using collaboration tools to reduce its environmental footprint. In a case study, the telecom provider reduced employee air miles by 15 percent through video conferencing and Web meetings. It also has an “Environment, Health and Safety Department” that hosts weekly Web conferences on environmentally preferable procurement.

Then there’s unified communications, which give enterprise employees access to voice, video, text, data sharing, corporate resources and applications, conferencing, presence information and IM, over mobile, remote office connections, home phones, what have you. This is the vision behind the recently released Microsoft Office Communications Server, which enables, through software, the ability for anywhere, anytime, intelligent access to resources and people across networks. No more running back to the office to catch up on work, or even being in the office at all — employees can be productive without leaving their homes.

Taken together, it looks like green may be the next virtuous cycle: less travel, less global warming, better business efficiency, more productivity, more service uptake, more innovation to make for less travel … the virtuous cycle tied to the cycle of the Earth.

Slowing the Data Center Drain
By Kelly M. Teal

When it comes to draining the world’s energy resources, data centers are one of the communications industry’s worst offenders.

A report issued this summer by the Environmental Protection Agency (EPA) said that last year data centers in the United States devoured 61 billion kWh of energy, costing data center operators $4.5 billion. Both of those numbers had doubled from the year 2000, according the report.

Experts say ever-increasing bandwidth needs are to blame — more data are stored digitally and applications such as video hog capacity. While this growth is good news for bandwidth purveyors in our industry, the consumption sucks up precious power and the output blasts heat and emissions into the atmosphere. Not only does this cost millions of dollars, it also hastens climate change.

Communications companies are more than aware of the problems. And, whether spurred by a sense of social responsiblity, a desire to cut power bills or attract new customers, many are going green.

It’s well known that industry titans HP, IBM Corp. and Sun Microsystems Inc. have developed eco-friendly servers and other computing gear, as well as assessment services and assistance in making their data centers more efficient. (For more on Sun’s efforts in this vein, see xchange’s October cover story.) Smaller vendors like Avaya Inc., Extreme Networks Inc., Foundry Networks Inc. and Mitel Networks Corp. also are delivering green gear. Some of these products cost more upfront than their less-efficient counterparts, but they promise to save energy — and dollars — in the long run.

That’s all good news for large enterprises, which are coming up against power and cooling issues and growing costs in the data center, writes Ian Brown, a senior analyst for Ovum’s IT Services Practice. He adds that these customers also probably could benefit from service providers getting in on the action, and vice versa.

“The surprise is that IT services vendors have done relatively little in the way of jumping on the bandwagon,” he writes in an analysis following Sun’s recent news on its eco-friendly efforts. “What better way to attack energy efficiency than by ‘outsourcing’ the problem to an IT services vendor’s shared data center? The future promises legislation around carbon footprints and pressure to reduce energy consumption. For most large enterprises, running power-efficient data centers is not a core competency; for infrastructure services providers, it should be.”

Indeed, “going green can actually make more economical sense” than not, says Ananda Rajagopal, a product marketing manager for Foundry.

But that doesn’t mean end users will rush to replace their infrastructure with greener technology, says Blair Pleasant, president and principal analyst of research firm COMMfusion LLC. For one thing, there are budgets to consider. Pleasant likens the situation to what’s happening with eco-friendly efforts in the automotive industry — many consumers might want to drive expensive hybrids but aren’t ready to replace their perfectly serviceable, gas-powered vehicles.

Plus, there’s some skepticism that environmentally friendly systems might not work as well as familiar, existing networks. Companies “are going to have to prove that the new technologies or systems are every bit as good as what [end users] already have,” Pleasant says.

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