Letters to the Editor For November 2008

One big picture development that holds considerable potential is the Chicago Climate Exchange (CCX), the world's first global marketplace for trading carbon credits.

Ideas on Reducing Energy Consumption

Your article on "How to Get IT Energy Costs Under Control" (September 2008) was right on point. While the cost of gas at the pump has captured everyone's attention, energy usage in all forms will surely continue to capture the attention of both corporate and political decision-makers.

One big picture development that holds considerable potential is the Chicago Climate Exchange (CCX), the world's first global marketplace for trading carbon credits. The CCX provides a medium for trading legally binding voluntary emission reductions, emissions trading and trade offsets for all six greenhouse gases. It is the type of capital market response that can both deter expensive and cumbersome regulatory action and allow companies to place a concrete value on their emissions and emissions reductions. This type of activity will become increasingly more active as state and local governments look for a way to offset spiraling energy demand, requiring additional power plant infrastructure.

There are also a host of things that can be done in your own operations that can have a notable impact on reducing energy consumption. One is the move toward "data-center-in-a-box" from companies like Rackable Systems, Microsoft and HP. This container or pod trend is a direct reaction to the inadequate aging data center infrastructures, the requirement for more wattage per square foot, and a more energy-efficient design to handle high density equipment like server blades and smaller-form factor disk drives that expel more heat. In addition, current brick-and-mortar infrastructure is not sufficiently modular to meet just-in-time computing demands. The lead time for constructing new data centers and the initial size required for them means that you waste early capacity until the footprint is ultimately filled with IT equipment, however long that may take. The box/pod approach diminishes that problem, and I look for this trend to accelerate. It's a more efficient use of power/cooling, provides repeatable labor-saving building processes and reduces the initial capital expenditures necessary for data center land and infrastructure.

My final suggestion for reducing IT energy consumption is the trend toward IT equipment vendors offering power consumption information at the server blade level. Only a few years ago, the only thing a data center manager had to worry about was IT equipment security and reliability. But because of this increased awareness on "green IT" and the environmental and economic benefits derived from it, IT managers are now more concerned with energy usage and metrics. Look for data center energy business service management (BSM) metrics for things like power consumed by server, off-peak power loads, energy-saving feature deployment and other similar measurements -- right next to CPU utilization and the number of transactions processed by an application.

Glen Seimetz
senior director
Siemens IT Solutions and Services
Norwalk, Conn.

China's Go West Strategy

I've been reading some recent IW articles on China and have found them quite interesting and well informed. One you wrote called "Just In Time -- The China Misconnection" (April 2008) quoted the findings of a Booz Allen study on rising costs, which surveyed the experience of U.S. companies in China. Apparently, more than half of U.S. companies thought that China was losing its competitive edge to other countries in the region.

I'm sure their experience is right: Labor and land costs have been rising significantly, and in some cases they are in short supply. The question remains: What to do about it and where next to go?

The survey goes on to look at the merits of India and Vietnam, and these are valid destinations, particularly for those that might want to diversify the geographical spread of their investments. However, the study apparently ignores the most natural destination for the majority of multi-national companies in China that want to stay in the country and are comfortable with the overall environment: China's interior. Yes, inflationary pressures are apparent here, too, but the cost base is much lower than on the coast and the investment incentives are about to get more generous (as part of the government's Go West strategy). What has held foreign investment enterprises back so far are logistical shortcomings, but even here the transport networks to the interior are being improved at a rapid pace.

Consequently, more and more companies are now assessing the major cities of the interior (Chengdu, Chongqing, Wuhan, etc.), whereas in the past they had no need to look beyond the comfort of the coastal regions. The American Chamber of Commerce recently took a sizeable delegation to Chongqing and our company is organizing a logistics fact-finding trip to the city this fall, and to Wuhan next Easter.

For many it's still early days, and rising fuel costs may complicate their calculations. But I've no doubt that we will see a major shift in investment patterns within China over the next decade, and this will be entirely desirable given the huge size of the country and the massive wealth inequalities that presently exist.

David Lammie
editor
Yangtze Transport
Yangtze Business Services Ltd.
London, U.K.

Focus on Jobs

>Re: "MAPI Says Tax Bill Would Harm, Not Help, U.S. Manufacturers."

We are entering an era where every existing and every new job will be even more important, with the boomers exiting the workforce and drawing on benefits. All policies need to focus on job creation such that more tax revenues will be created, even just through payroll taxes, rather than corporate income tax increases.

Doug Kieffer
director, accounting/finance
Epson Portland Inc.
Hillsboro, Ore.

Do No Harm

>Re: "Viewpoint: The Employee Free Choice Act: Is Your Company Prepared for It?"

If all companies did what was right and did not exploit their workers, then you would not have to worry, would you? Treat people fairly and your business will do well. If not you and your business will fall sooner or later. Justice will catch up to you sometime; you cannot keep on exploiting people.

Natalie Compton
Indiana State University
Terre Haute, Ind.

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