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Hi everyone, and welcome to Green Book TV. My guest on the show is Rich Lechner, back

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again for the Monthly Rich. How are things on your side of the world?

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It's great, thanks. A little bit foggy that spring is finally here, and it's great.

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Superb. Rich, you guys made an announcement around energy management last week, the week

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before, a week or two back anyway, and it talked to energy information being brought together

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within an organization. Can you talk to me a little bit about that and how you see that

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and the reasons why you think it's necessary?

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Yeah, sure. We've been talking about this notion of the smarter planet and the idea that things

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are becoming increasingly intelligent and interconnected and instrumented.

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The consequence of that is that, one of the consequences of that is that this notion of

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the world of IT, which we thought of as PCs and, you know, servers and storage devices and

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data centers, and the world of infrastructure, buildings and vehicle fleets and manufacturing

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systems, that these worlds are converging or colliding. And over time, the notion of infrastructure

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infrastructure will be, you know, this merged infrastructure where things are intelligent and

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instrumented. And you won't, you know, we'll see a movement away from the silos of, you know,

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where you have IT managing their servers and storage or their data center facilities. You've got

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the RISO people managing the buildings and the manufacturing operations. You'll have, where you have

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vehicle fleet managers managing vehicles. And the idea of this, one of the, you know, the cornerstones of

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this announcement that we made was that while today, these worlds live in isolation, that over time,

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they will converge. And we envision a time when people will optimize for energy use and for carbon

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emissions across that broad definition of infrastructure, IT, facilities, real estate, and, you know, other assets

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like cell towers or vehicle fleets or manufacturing systems. Now, so, so the notion was, how do we deliver a

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management strategy to allow people to do that ultimately, even though today, these things are very isolating.

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Okay, but currently organizations, you know, the IT guy doesn't talk to the facilities guy, doesn't talk to the fleet guy, doesn't talk to the guy in charge of the cell towers, doesn't talk to, you know, whoever is responsible for different portions of energy within the organization.

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They're not talking to each other. How do you get that to change? That's a huge people management issue, not just a technical issue. I mean, you're saying you've solved the technical side or you're heading that direction anyway.

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But there's a huge organizational development issue in the back end that needs to change as well.

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Yeah, really, you're absolutely right. In fact, you know, you could argue that the mainframe guys don't talk to the x86 server guys or the storage guys don't talk to the server guys.

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So, trying to get the IT guys to talk with the reso folks or the fleet operations people, you're right, that's a bit of a stretch, right?

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So, there is, it is an operational and a process re-engineering issue as much as it is a technology issue.

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Now, what we have done, first of all, is to provide a common set of tools in a dashboard to allow people to manage these different domains in a consistent fashion with a consistent set of sort of stepwise processes from monitoring and instrumenting first to then for energy to managing and optimizing and setting policies around energy use to ultimately reporting on energy use.

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So, that's the first step is to provide a consistent methodology and set of steps and a consistent dashboard.

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I think what will drive this will be the emergence of a dashboard at a higher level, a chief sustainability officer who's responsible for the carbon emissions of the corporation or the chief energy officer or, in many cases, this may be just tags assigned to the CFO.

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But, but we do envision a time when there will be a dashboard and a new key performance indicators around energy use and carbon emissions.

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And if you think about things like CRC coming in the UK in April of next year, right, the carbon reduction commitment, which will impact somewhere between 3,000 and 5,000 businesses across the UK.

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So, we're not talking about something that affects only large emitters or utility companies, but, you know, businesses of all sizes well down into what we would call small or medium business.

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Then there's going to be the need for these key performance indicators and the need for a dashboard to monitor carbon.

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And the best way to do that, frankly, is to monitor energy use, you know, across all the operations.

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So, you can imagine this dashboard where that will be monitoring.

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And the inputs to the dashboard may still come from these different domains.

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You know, you'll have an input from the IT and the data center.

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You'll have an input from the building and facilities, a different input from the fleet operations.

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But over time, we believe you'll see more of this being managed in an integrated fashion.

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What are the potential wins out of this?

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I mean, we're looking at now for the first time being able to see all the energy information being brought together.

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The idea being that we reduce the usage and see where maybe there are overusages of energy for whatever reason.

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So, we're able to identify targets to knock energy.

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Sure.

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I mean, we have lots of data that shows that, you know, the old adage, you can't manage what you can't monitor.

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Well, that's absolutely true, right?

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So, and we do have concrete examples of customers and end users changing their behavior in the use of IT resources when presented with the energy footprint associated with those resources.

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So, even in a very dynamic or shared, virtualized environment, if you can tell an end user, you know, process owner or a data set owner or an application owner that this is the energy footprint associated with your data and your applications and processes,

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that you will, in fact, modify the behavior of those individuals and they will agree to shift to a more heavily utilized, more efficient environment.

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We believe the same thing is true in process owners, whether it be manufacturing processes or supply chain.

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So, providing that information, we believe, will result in reduced consumption, reduced emissions, and a modification of behavior.

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We also believe it will enable the reporting for either the benefit of applying to a utility or regulatory body that's offering an incentive around energy efficiency or demand reduction,

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or for the benefit of reporting for schemes like the CRC in the UK and RGGI in the northeast of the US and other places around the world.

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Speaking of the CRC in the UK, do you think there's going to be some kind of federal equivalent in the US?

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Well, all the indications are that, you know, certainly President Obama is pushing for that, and there is a very aggressive bill going through the US Congress right now.

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Now, there's some debate as to whether it will pass the Congress or, if it does, will it pass the Senate.

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But certainly the intention is there for a fairly aggressive federal-level carbon reduction act of some sort and monetization of carbon.

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Already in the US, there are three regional greenhouse gas emissions standards in place, one in the northeast, one in the midwest, and one in California.

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So, it's already begun.

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And, of course, it exists in Australia and other countries around the world as well.

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I don't know what your own personal belief is, but I'd be a strong believer that a carbon tax or some kind of system where people have to pay for the carbon that they emit is one of the few ways we have of really forcing down the emissions of carbon.

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Well, I think that, I mean, there's no doubt that there's going to be some form of monetization of carbon.

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Now, whether that takes place in a cap-and-trade system or a carbon tax is, you know, that's up for others to debate and decide on.

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But what we're trying to do is enable, you know, whatever legislation passes in the various places around the world.

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And, by the way, there's over 56, I counted two weeks ago, there's over 56 regions around the world where a region might be a country or a state in the US or a municipality somewhere in a European country.

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But over 56 now that have carbon reduction legislation in place.

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So it's growing rapidly.

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Regardless of how, what gets legislated, what we want to do is help clients be able to measure it and report on it in a verifiable fashion.

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Super. Rich, that's been great. Thanks a lot for coming on the show.

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Great. Thank you for having me. Bye.