Datamonitor: Green IT gains an upside in the economic downturn

Global economic recession has squeezed IT budgets, hindered capital expenditure, and generally slowed IT development growth. A report by independent market analyst Datamonitor, "Can Green IT Bloom in an Economic Downturn," suggests the IT market may like the color green.


Green IT is gaining an upside in the economic downturn. The current global economic recession has squeezed IT budgets, hindered capital expenditure and generally slowed the growth of IT development. However, according to a report just published by independent market analyst Datamonitor, "Can Green IT Bloom in an Economic Downturn," the recession also may provide significant upside to the green IT market.

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the various ways the green IT market has adapted and evolved in response to broader business conditions.It also provides recommendations for green IT vendors and end-user organizations. Datamonitor provides online data, analytic and forecasting platforms for key vertical sectors. Forecasts are available for automotive & logistics, consumer markets, energy, financial services, healthcare, retail and technology.

"The global economic recession has spurred a paradigm shift in the way organizations evaluate, budget for and deploy green IT," says Rhonda Ascierto, senior analyst at Datamonitor and the report's author. "The downturn has also resulted in green IT trends for datacenters, client devices and asset lifecycle management, as well as re-shaped return on investment (ROI) models."

Green IT that eliminates capital expenditure is increasing in demand

Current green IT investments are driven by compliance with environmental legislation and cost savings. In particular, green IT that eliminates the need for capital expenditure (capex), such as datacenter virtualization, datacenter design and layout, and asset lifecycle management, has become increasingly important as IT budgets remain constrained.

Datamonitor research shows IT budgets are likely to remain flat in 2009, which means cost-effective green IT is likely to increase in demand. As such, organizations no longer regard green IT and cost-effective IT as being mutually exclusive. This represents a significant paradigm shift and bodes well for the future evolution of the global green IT market.

Restrained IT budgets also mean that green ROI models are becoming compulsory and shorter. For green IT vendors to satisfy new ROI requirements, they are being forced to develop more efficient and greener IT solutions.

Green IT is becoming more important in the datacenter

Flat IT budget growth also means that organizations that face critical datacenter limitations, such as a shortage of floor or rack space, are looking to software or outsourcing alternatives to building new datacenters or upgrading existing facilities. Those alternatives include IT leasing, managed services, virtualization software, cloud computing and software-as-a-service (SaaS).

Datamonitor believes datacenter resources will increasingly be hosted in a cloud computing environment, which should - at least theoretically - fall under the green IT banner.

However, the greatest demand for datacenter green IT will be for datacenter virtualization. Datacenter virtualization is becoming more holistic, whereby various assets, including servers, storage, communications infrastructure, and business applications, are being virtualized across a pool of datacenter hardware. Datamonitor believes business applications are the next frontier of datacenter virtualization.

- Edited by Mark T. Hoske, electronic product editor, MBT

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