EU Connect Presentation (28-09-2022)

Since I’m starting, I think it’s useful if we start with what a data center is, and untangle it a bit.

So let’s start at the beginning, with the building, the data center facility. You can think of it as an empty office building. It requires a plot of land, resources, and connectivity. It comes with sophisticated power equipment, backup power, and lots of cooling infrastructure, all of which comes with its own resource demand and carbon emissions.
Now what does a data center facility produce? Essentially cooled space, very reliable electricity for IT equipment and fast access to the internet.
This is the business model we often hear as ‘co-location’, but it can also be an enterprise that has facilities for it’s IT departments to use.
But it remains an office building without walls, furniture and a nice coffee machine.

The furniture, that is the IT equipment, comes next

You can think of servers and network equipment, again each need to be manufactured which comes with vast resource demands, energy, etc.
Once the generators, the furniture is moved in, the data center facility is producing digital resources using IT equipment. The output of the building now is a single commodity which we refer to as digital resources.
the business model of this combination of facility and IT infrastructure we recognize in cloud infrastructure, infrastructure as a service and traditional hosting providers.
Digital resources can not be stored and must be used when generated otherwise they are wasted. So a facility that is full with equipment is like an office filled with furniture but no people.

Digital resources become useful when they are consumed by software applications

And software is what powers two distinct movements in our society:
  1. The massive expansion of the digital economy through the internet & software
  1. The digital transformation of other industries through software
Digital resources are the commodities that power all of it, which is why we see such a hype around the digital resource factories - data center facilities & IT infrastructure.

To help us think about this in simpler terms, we created a model, mapping the entire value creation of the digital sector

At the bottom, digital infrastructure summarizing all digital resource generation we just discussed.
Resource provisioning providers are often hosting companies and cloud providers - they ensure availability of resources. They sometimes are vertically integrated with the infrastructure itself.
Software application vendors are procuring digital resources from resource provisioning companies.
And users or customers are using those applications.

Now with this model, we can assign clear responsibilities to market actors

Users are responsible for sustainable use and disabling functionalities they are not using.
As a manufacturer of software, of digital products, I am responsible to minimize by resource usage. And I need to make it transparent to my customer how their usage is increasing or decreasing environmental impact. I should also procure sustainably-made digital resources from suppliers.
As a resource provisioning provider, I am responsible for ensuring good utilization and reducing wasted digital resources. And I need to support the procurement process of the manufacturers by giving transparent information on the environmental impact of the digital resources I am selling.
And for the digital infrastructure industry its paramount that they produce sustainable resources for the rest of the sector to utilize.

In this value creation chain there are two main leverage points for sustainability

Within the infrastructure itself, the second point, Emma and Miguil will shed some light today, I’ll focus on 3 challenges that I will briefly highlight on the software & resource provisioning layers.

It starts with transparency, and I will briefly touch on 3 key challenges currently prohibiting it

The first challenge is simple: Customers or users of digital products have no transparency on how their usage is creating environmental impact

When I am in an electric car and I drive aggressively I can see the impact on the energy use and range of the battery immediately. I will even see the effect on the long-term health of the battery.
My usage of the car is directly translated into energy use & impact.
When using software or digital products, I have no such indications, lots of usage, lots of files, or little files & usage, do seemingly do not make a difference.
This will not lead to sustainable usage, but rather to the idea of limitless resources in the digital realm, which of course is not possible.

The second challenge is that software applications do not have the information to determine their own environmental impact

Yes they know how many digital resources they are consuming, but the resource provisioning providers are not making the environmental impact of each resource transparent. Without this information it will be impossible to solve the first challenge.
We can use existing Life Cycle Assessments to have a standardized methodology for assessing and reporting the digital resources generated by different providers.
And by the way this issue is not specific to large cloud providers, but is consistent across the entire sector, European actors also do not provide this information.

The last challenge is the lack of a standardized method for reporting the environmental impact of software usage to the customer

There are many organizations across Europe and the US working on such methods and are already pushing to standardize, but they are often limited, vague or too complex.
The SDIA has already unified the most of them and has created a community to move forward with a single, usable and truthful standard for assessing the environmental impact of applications & creating transparency for the user.

Of course at the SDIA we are working on all these challenges, so reach out if you would like to chime in.

Thank you for having me.