Green IT Services – Worth £3.2 Billion in 2013?

Green IT services will grow 60 percent every year till 2013, when it will reach at £3.2 billion ($4.8 billion) worldwide, says Forrester Research.

The market for green IT services is bucking the recession because it plays to businesses’ need to save money and be more efficient, says Forrester. 451 Group analyst Andrew Lawrence agrees – read our interview, Did The Recession Kill Green IT.

More enterprises are investigating hiring IT services firms to help plan and implement green IT initiatives, and while the global recession is putting a squeeze on IT spending, it is also persuading corporations to optimise their existing IT assets rather than buy new ones, and is fueling the federal government’s drive to fund green projects.

The market could grow from about $450 million (£300 million) in 2008 to $4.8 billion (£3.2 billion in 2013 before leveling off in 2014, Forrester analyst Chris Mines said in his report.

“In the context of a $500 billion global market for IT services in 2008, the $5 billion market for green IT services [in 2013] may look like small potatoes to vendor strategists,” Mines said in the report. “However, we expect that the visibility and strategic importance of green IT projects will put them near the top of many corporations’ consulting agendas.”

Essentially, enterprises are going green and want to find vendors that can help them, from data centre giants such as Cisco Systems, Dell, Hewlett-Packard, IBM and Sun Microsystems to service providers such as Accenture, Capgemini, Deloitte and Infosys.

Driving the growth of green IT services is a combination of enterprise desires to save money and to do good, Mines said in his report. Businesses are deploying sustainability metrics around such criteria as water and power use, and are also starting to track their corporate carbon footprint.

At the same time, there is a greater enterprise push in capital-intensive projects to optimise the current IT assets already on hand rather than going out and buying new ones. In addition, while green IT projects are still primarily targeted at the data centre, they also are growing into other areas, such as corporate desktop environments.

Forrester saw a jump between its survey in October 2007 and a second one in October 2008 in corporate interest in retaining a professional services provider to help plan and implement a green IT initiative.

In the 2007 survey, 70 percent of respondents said they had no plans; that percentage dropped to 54 percent a year later. Eighteen percent in 2007 said they weren’t currently using an IT services provider, but that they were considering the idea. In 2008, that number jumped to 30 percent.

Mines’ report found that emerging markets showed the most interest, as did the utilities and telecommunications markets. Other research recently found that interest in green outsourcing is waning

However, there were some positive and negative factors that went into calculating the latest projections. The global recession will cause worldwide IT spending to shrink by 3 percent this year over 2008—with IT services and outsourcing spending falling along the same lines. In addition, the recession’s negative impact on corporate capital spending convinced Mine to reduce the average spend on a green IT project’s implementation phase from about $1 million to $800,000, reflecting the interest by businesses to optimise existing IT assets rather than buy new ones.

However, Mine said, there is increasing corporate interest in green IT—Forrester increased the percentage of green IT interest in North American enterprises from 75 percent to 80 percent, and from 60 percent to 75 percent in Asian enterprises. The percentage of European enterprises remained at 90 percent.

In addition, a key response from the Obama administration to the recession has been to focus some stimulus money on green projects, many of which will have significant numbers of IT components involved.