IBM: Green IT Still Going Strong

Even in a recession, firms are willing to spend big to get green, according to IBM
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Tech spending may have taken a hit with the onset of the global economic crisis, but firms are still willing to spend big money on green IT. This is the message from tech giant

IBM

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, which has thrown its considerable weight behind eco-friendly technologies.

"What we're seeing is that there is no slowdown," said Rich Lechner, vice president of the company's energy and environmental business. "It's being driven by the need to reduce costs, both operating costs and capital investments."

Lechner told

TheStreet.com

that in more than a third of the IT projects conducted in 2008, the primary drivers were energy efficiency and green issues. "We will find it that it will be the same

level or more

in 2009," he added.

Despite Lechner's optimism, there are signs that the recession has taken its toll on the green IT agenda. Research recently released by

The Cleantech Group

and

Deloitte

, for example, found that venture funding for "clean technology" has fallen dramatically in the economic downturn.

During the first quarter of 2009, VC funding of clean technologies such as solar power and biofuels dropped by 48% compared to the prior year, the report said, as the recession impacted investors.

IBM, however, is confident that President Obama's stimulus package will re-ignite the green agenda.

"There's over $5 billion of stimulus money tagged for energy efficiency," said Lechner, adding that companies are becoming more aware of energy compliance.

With energy efficiency standards established in more than 22 U.S. states and many countries looking to rein in power use, IBM said that users are already rethinking their data centers. More than 80% of the CEOs recently surveyed by the firm said that climate change requirements will affect their business within the next five years.

With rival

Hewlett-Packard

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also pushing "eco solutions" such as a deskjet printer made from recycled plastic, IBM is not the only tech firm chasing the green dollar, although it has made the most noise about its green credentials.

In 2007, IBM launched its "Project Big Green" in a blaze of publicity, promising to invest $1 billion a year in green IT, which is just under 1% of the company's total 2008 revenue. The hardware and software supplier is making its own infrastructure more eco-friendly, ramping up its R&D, and, of course, looking to boost sales of its green-tinged products.

IBM touts its blade server technology, for example, as a way for users to reduce data center space and power consumption, but now faces competition from

Cisco Systems'

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recently-launched

Unified Computing System (UCS)

Smaller firms may prove to be crucial in IBM's attempt to drive revenue through green IT.

"The survey work that we have seen says that the adoption

of green IT by SMBs is slightly higher than large enterprises," said Lechner, adding that small- to medium-size firms are really feeling the pressure of rising energy costs.

Looking to the future, Lechner said that IBM is eyeing green opportunities outside of the data center, such as

water services

, "smart" energy grids and even systems for making vehicle fleets more efficient.

Last month, IBM unveiled a new business unit as part of its "Big Green Innovations" effort, which will design and install sensors and software to monitor water pipes, reservoirs, rivers and harbors. The company has already deployed its monitoring technology in Galway Bay, Ireland, to perform wave analysis for power generation.

IBM is also involved in a $94 million, five-year project to build a "smart" energy grid on the Mediterranean island of Malta. The company will replace all the island's 250,000 analog electricity meters with electronic devices, and will also deploy meters to monitor the country's water consumption.

"The nice thing about Malta is that it demonstrates our capabilities in deep analysis -- there's a number of these 'first of a kind' projects that we will replicate elsewhere," said Lechner. "Large university campuses are just one example of where smart energy grids could be implemented."

Despite all its green hyperbole, IBM does not break out a specific revenue figure for its eco-friendly initiatives. Recent moves, however, are clearly designed to bolster its services offerings, which accounted for almost 60% of the firm's 2008 revenue.