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How SAP achieved LEED Platinum certification for their headquarters in Pennsylvania

September 4, 2013 by Tom Raftery

As I was in Pennsylvania to attend SAP’s Analyst’s Base Camp event earlier this year, I took the opportunity to get a tour of the new LEED Platinum certified Headquarters building. I was shown around the building by the facilities manager, Jim Dodd, who informed me of the different steps taken to enable the structure to achieve its an impressive LEED Platinum certification from the U.S. Green Building Council (USGBC).

I videoed the tour and see below for a transcription of it:

Tom Raftery: Hey everyone! Welcome to GreenMonk TV, I am here in Newtown Square at SAP Headquarters. I am with —

Jim Dodd: Jim Dodd.

Tom Raftery: Jim, you are —

Jim Dodd: The Facilities Manager for the campus.

Tom Raftery: Okay, now we are standing on a — we are in the new building in Newtown Square.

Jim Dodd: The new LEED Platinum Headquarters’ building, right.

Tom Raftery: Okay, and can you tell me about the floor that we are standing on?

Jim Dodd: In comparison to the floor in the headquarters’ old building, where we used marble that was imported from Italy, what we wanted to do was to reduce that cost and do a sustainable floor. And so this floor is a concrete floor, and it has a mixture of seashells and glass in it on a terrazzo finish and then we polished it and honed it up, so it would be nice and shiny. But it’s considerably less expensive obviously than the marble floor in the main building and we use it in the atrium area in a radiant floor which we’ll talk about in a minute.

But it’s a less expensive solution and yet it’s a very attractive solution in terms of the flooring for both the link to the new building and the atrium that runs the full length of the floor downstairs on the promenade.

Tom Raftery: So, Jim, tell me about the floor.

Jim Dodd: Okay. In the promenade area, below us here, is a radiant floor, we have pipes that run through that floor and we have ten geothermal wells that are drilled in the back of our property. We take the water out of the ground where it comes as a constant temperature and we pump it through the piping on the concrete floor downstairs and the floor radiates heat or air-conditioning depending on what time of the year it is. And it helps to keep this big atrium very comfortable without having to use large amounts of air-conditioning or heating.

Tom Raftery: So it’s just using natural heat or cooling from the earth.

Jim Dodd: That’s correct, yes. So the water really comes out about 55 degrees out of the ground and we can pump that through the floor and that cools the concrete and radiates coolness in the summer time, and then in the winter time what we got to do is heat that water up to about 72 degrees and then we pump that through the floor and it heats the concrete and it radiates heat off the floor, and because it’s on the floor, it affects the employees immediately and it keeps the atrium very, very, very comfortable.

Tom Raftery: Okay, and you’ve got these nice banisters.

Jim Dodd: Yes, it’s an interesting situation here. When the original site survey was done for this building, it would have wiped out of a grove of the mature Chinese chestnut trees that are absolutely beautiful and are part of the aesthetics of the campus. So we moved the building in order to save half of those chestnut trees, but the chestnut trees that we did have to harvest in order to put the building here, we had them milled into handrails for the whole building.

About 90% of what’s in this building to construct it was sourced locally within 500 miles of the building and that’s a sustainability feature again, it provides points on the LEED scale because it cuts down on your carbon output because you are not exporting things from thousands and thousands of miles away.

Tom Raftery: So Jim, tell me about the under floor?

Jim Dodd: Yeah, the difference — the primary difference between the original building and the new building is in the original building the air distribution comes down from the ceiling plenum, and of course, that’s not very efficient because heat rises, so if you are trying to get heat down to where the people sit, it’s not in a very efficient approach. In this building, we use an under floor distribution where the air comes up through the floor and it’s controlled in each location with a vent, so people can control the amount of air coming in their space and by coming up from the floor, the treated air gets to the employee immediately and there is an immediate reaction to that temperature adjustment.

In the other building of course the hot air comes down but it turns around and goes right back up, so it’s not as efficient as this underfloor system is in this building here. We have a wood feature in each of our hallways that separate the neighborhoods and it’s made from bamboo. Again a sustainable wood that’s renewable every seven years in comparison to oak or walnut or some other wood that takes 40 or 50 years to mature. We decided to use bamboo in this building because it’s sustainable.

Tom Raftery: So, tell me about the carpets.

Jim Dodd: So the carpet, in most instances when you install large amounts of carpet, there is volatile organic chemicals in the carpet like formaldehyde that require you to aerate the building for a period of time before you can occupy it. We work with the manufacturer of this particular carpet to reduce or eliminate VOCs in it. So we did not have to ventilate the building for a period of time prior to occupancy.
And it makes for a cleaner environment for the employees overall without the organic chemicals off gassing from the carpet.

Tom Raftery: So what have we got beside us, Jim?

Jim Dodd: This is a filter water system that we put in. A number of years ago we used to provide bottled water for the employees and then we realized how much plastic waste was being generated, and even though it was being recycled. We decided to eliminate bottled water from the campus and we installed one of these Innowave water systems in each of our pantries. It’s filtered and it also cools the water and heats the water. So if you want to make tea, you can get hot water, and if you want cold water, you can get cold water.

But it reduced our cost by over $120,000 on bottled water, and got rid of the plastic issue.

Tom Raftery: So, Jim, where are we now?

Jim Dodd: We are in the chiller room of the new building of the Platinum LEED building and what we do that’s unique in this building in comparison to other buildings is we actually make ice at night and store it in these very big tanks behind me, and we use the system because at night the electricity is less expensive and the pressure on the grid is lower. So we don’t have to run the chiller during the day, because what we do is, we melt the ice during the day when we need air-conditioning and then we use that to cool the building and we don’t have to use our chiller during the day, when the grid is being stressed by everyone else, wanting air conditioning.

Tom Raftery: So Jim, tell me about this garden, where are we?

Jim Dodd: We are on the roof of the new building, believe it or not, and this is a green roof, this is a very unique approach to maintaining constant temperatures in the building. By having a green roof we keep the building cooler in the summer and warmer in the winter.
The other unique thing about this, as you can see we have to mow grass and we didn’t want to have to store gasoline up here, because it’s a hazardous flammable material. So we sought out a company that made a very good electric lawnmower and we mow the grass up here with electric lawnmower. In that way, we don’t have to store any gasoline up here, and it’s quite and it doesn’t just dirt people when they are working, it’s just a very unique approach to roof construction.

Tom Raftery: Jim, what have we behind this?

Jim Dodd: Behind this is the meadow as a part of our 102 acres of property here, and what we did this year, was working with the Triskeles Foundation and One Village, One Farm, these are non-profit organizations; we agree to put in an organic garden. We have enough room. So we put in a 100×50 organic garden with 22 raised beds and we’ll donate the food at the end of this year to all the local food banks.

We expect to produce hundreds of pounds of produce in this garden, and working with organic, no pesticides or anything like that, all natural ingredients to keep the bugs off, and then there is a 6 foot deer fence around it, because we have a lot of deer on the property and the garden would just get eaten to nothing. So we put a fence around it to protect it from the deer.

So we’re doing cucumbers, summer squash, tomatoes and peppers, and then, we’ll have a fall planting as well, and all of that food will go to the local food banks.

We have 80 volunteers that have volunteered to take care of the garden. So we have plenty of people to take care of it, and it’s going to work out really, really well, and it’s another sustainable aspect of the property.

We also have two beehives on the property as well. We have a beekeeper that works for SAP and he had asked us if he could put beehives on the property. And we agreed to do that, because we felt that that was another sustainable issue in terms of pollinating and protecting the bees.

There has been a degeneration of bee colonies around the world and so having good bee colonies is very important to the propagation of all the different plant life that we have on the campus. So we decided to put the beehives here as well.

Tom Raftery: So what have we behind us, Sir Jim?

Jim Dodd: Okay, what you see behind us here is a 60,000 gallon cistern, buried in the ground, and we collect our rainwater in that cistern and then we use the rainwater for irrigation and flushing toilets, you know what, they call brown water or gray water, and with all the rain that we’ve had it’s full.

But it’s another way for us to get LEED points, but it’s also a better way to manage our water consumption on campus because we can use that rainwater to irrigate. We have a beautiful courtyard in between the two buildings and we irrigate that with that water. We also irrigate the green roof that you’ve seen with the cistern water. So it all goes into that 2 million gallons of savings of water per year.

Tom Raftery: So why are we standing beside this artwork, Jim?

Jim Dodd: This is part of our social sustainability program where we work with local non-profits to do certain things. In this particular case, we work with a non-profit called Fresh Artists. These are young children, these are not adults, these are children who have painted this artwork that you see behind you.

We make a donation, substantial donation to fresh artists, so they can buy supplies and easels and paints and brushes for their children, and then we in turn purchase their artwork to hang in this building.

So except on the executive floor, all other floors of this building have examples of this artwork from these young children and some of them are quite attractive and fun. But it’s a social sustainability thing as a part of our work with the community.

And the IT systems?

Jim Dodd: It’s a dashboard.

Tom Raftery: Right.

Jim Dodd: And it tells you the consumption of electricity in this building, the consumption of electricity in the other building, and it tells me what my PUE is in my data center, which is a –

Tom Raftery: I know PUE.

Jim Dodd: Okay, you know what that is. So it tells me how we’re operating, whether there’s some kind of anomaly, we’re using more electricity than usual. We can get just a quick glimpse of how the building is functioning, and what its consumption rates are in both buildings.

But then they go far beyond that and they can drill down to an individual air handler, right to the motor and determine if it’s running, how fast it’s going, how much power it’s using. We monitor over 10,000 points of information of data on all the systems in the building.

Full disclosure – SAP paid my travel and expenses to attend the SAP Analysts Base Camp

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SAP releases mobile app for utilities customer engagement

May 3, 2013 by Tom Raftery

They say the secret to any good relationship is communication.

Most utility companies don’t seem to have received the memo though. In a lot of cases, the only time you hear from your utility company is when you receive a bill, or a disconnect notice. Neither are very positive forms of communication. It is no wonder then that utility companies generally are not held in high regard.

In an effort to help utility companies improve their communications, and connect more closely with their customers, SAP this week launched their Utilities Customer Engagement mobile app. The new mobile app is available now for download from the iTunes Store and Google Play.

The app has lots of cool functionality, such as the ability to see and pay bills, check consumption and outage information and High Bill Alerts and other messages in the Message Centre, to warn customers when their bill is going to be higher than usual. This would have been very handy for PG&E to have had back in 2009 when their smart meter rollout was incorrectly blamed for customers suddenly receiving higher bills.

Facebook reported last December that the number of people accessing the site from mobile devices now exceeds access from desktop devices, and not surprisingly, this has also been true of Twitter for some time. Given that, it could be that SAP are missing a trick here. It would be very useful if in the My Profile section of the app, customers could enter their social media details (Twitter account, Facebook, Google+ etc.), then the app could send them messages and alerts to their social network of choice, rather than customers having to log into the app to see alerts.

This is a fundamental tenet of good communications – talk to the customer on their platform of choice, don’t force them to come to you. Perhaps in version 2.0.

Of course, this mobile app will only be any good, if SAP can persuade their utility customers to deploy it – whether they can pull that off remains to be seen (but, I know I’d want my utility company to roll it out!).

Image credit Lady Madonna

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SAP TwoGo – ride-sharing software for the enterprise

May 2, 2013 by Tom Raftery

In a less than obvious move earlier this week, SAP launched a ride-sharing app called TwoGo.

Why less than obvious? Well, ride-sharing is generally perceived as more of a consumer focused activity, than an enterprise one. And SAP is very much an Enterprise software company.

A quick search for ride-share iPhone apps, for example returns 24 results, all of which are consumer software plays.

TwoGo is more than just a smartphone app though (it is available on most mobile platforms), TwoGo customers can also access it through its website, via email, via any iCal enabled calendar application, and even via SMS.

It is a single instance, multi-tenant cloud application. This is important because it means for any organisations deploying TwoGo, set-up on SAP’s side simply involves adding the organisations email domain to the customer table. Then employees are immediately enabled to create a TwoGo account by signing up with their work email address.

Also, because it is single-instance and multi-tenant, smaller companies can sign up and benefit from sharing rides with employees of other companies in the area who are also TwoGo subscribers.

And because TwoGo works with email, and iCal already, integration issues are minimal.

Why would an organisation want to deploy a ride-sharing app, you ask?
There are several good reasons –

if companies are subsidising travel for employees, ride-sharing reduces the number of trips taken by employees, thereby contributing directly to the organisation’s bottom line.
For organisations with vehicle fleets, this also reduces wear and tear, service and maintenance costs for vehicles.
Then there’s the issue of having to provide car parking spaces for employees – this is expensive and a poor use of the space. Reducing the number of cars coming to work, de-facto reduces the amount of car parking spaces an organisation needs to provide.
And, obviously, ride-sharing will also reduce the organisation’s greenhouse gas emissions.

Then there’s the more intangible benefits –

Employees spending more time together leads to serendipitous meetings – what was previously ‘dead time’ in the car can now be productive
And it brings employees closer to each other and to the company

What about employees though – what benefits can they get from ride-sharing?

The obvious one is the ability to use carpool lanes on freeways where traffic often moves significantly faster
Also, according to the US Census Bureau, nearly 600,000 Americans have “mega-commutes” of at least 90 minutes and 50 miles each way to work. A significant number of those would benefit from ride-sharing because of reduced costs (fuel and automobile wear and tear) and also to share the driving load. Driving, especially in heavy traffic, is frustrating.
Then there’s the social benefits of meeting new people, making new friends and learning more about other job functions in your organisation.

TwoGo, although just now being released, has been in operation at SAP for 2 years now. It is at release number 4.5, so this is already a mature product. SAP themselves report that TwoGo has generated more than $5 million in value, reduced greenhouse gas emissions by eliminating 400,000 miles of driving, and matched employees into carpools more than 36,000 times, creating 2,200 additional days of networking time among employees.

The app is highly configurable and has clever algorithms which only offer a user a ride to work, if it can also offer him/her a ride home that evening, as well. And obviously, the app has block lists to ensure you are not repeatedly offered lifts with someone you’d rather avoid.

Given all the benefits of TwoGo, we have to wonder why other enterprise software vendors haven’t come up with a similar product before now. Or have they? Does TwoGo have an enterprise competitor we’re not aware of?

Carpool lane image credit Lady Madonna

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Facebook and ebay’s data centers are now vastly more transparent

April 22, 2013 by Tom Raftery

Facebook announced at the end of last week new way to report PUE and WUE for its datacenters.

This comes hot on the heels of ebay’s announcement of its Digital Service Efficiency dashboard – a single-screen reporting the cost, performance and environmental impact of customer buy and sell transactions on ebay.

These dashboards are a big step forward in terms of making data centers more transparent about the resources they are consuming. And about the efficiency, or otherwise, of the data centers.

Even better, both organisations are going about making their dashboards a standard, thus making their data centers cross comparable with other organisations using the same dashboard.

There are a number of important differences between the two dashboards, however.

To start with, Facebook’s data is in near-realtime (updated every minute, with a 2.5 hour delay in the data), whereas ebay’s data is updated every quarter of a year. So, ebay’s data is nowhere near realtime.

Facebook also includes environmental data (external temperature and humidity), as well as options to review the PUE, WUE, humidity and temperature data for the last 7 days, the last 30 days, the last 90 days and the last year.

On the other hand, ebay’s dashboard is, perhaps unsurprisingly, more business focussed giving metrics like revenue per user ($54), the number of transactions per kWh (45,914), the number of active users (112.3 million), etc. Facebook makes no mention anywhere of its revenue data, user data nor its transactions per kWh.

ebay pulls ahead on the environmental front because it reports its Carbon Usage Effeftiveness (CUE) in its dashboard, whereas Facebook completely ignores this vital metric. As we’ve said here before, CUE is a far better metric for measuring how green your data center is.

Facebook does get some points for reporting its carbon footprint elsewhere, but not for these data centers. This was obviously decided at some point in the design of its dashboards, and one has to wonder why.

The last big difference between the two is in how they are trying to get their dashboards more widely used. Facebook say they will submit the code for theirs to the Opencompute repository on Github. ebay, on the other hand, launched theirs at the Green Grid Forum 2013 in Santa Clara. They also published a PDF solution paper, which is a handy backgrounder, but nothing like the equivalent of dropping your code into Github.

The two companies could learn a lot from each other on how to improve their current dashboard implementations, but more importantly, so could the rest of the industry.

What are IBM, SAP, Amazon, and the other cloud providers doing to provide these kinds of dashboards for their users? GreenQloud has had this for their users for ages, now Facebook and ebay have zoomed past them too. When Facebook contributes oits codebase to Github, then the cloud companies will have one less excuse.

Image credit nicadlr

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SAP releases its Integrated Report 2012 – an integrated financial and sustainability report

April 8, 2013 by Tom Raftery

SAP released their first Sustainability report in 2008 (their 2007/2008 report). Like the reports of most other companies at the time, it was released as a PDF document but SAP quickly shifted gears. SAP’s 2008 Sustainability report, was released as a website. This had the dual purpose of making the site more accessible, and also allowing SAP to see which areas of the site had more traction. The following year they made their report more social and every year since they have added something new.

As well as releasing its Sustainability reports each year, SAP also published its annual financial reports. This year, for the first time, SAP have integrated the two reports and they have just published their SAP Integrated Report 2012. It takes the form of a highly interactive website with built-in analytics and downloadable PDF’s.

This was an idea GreenMonk first mooted when I asked SAP’s Chief Sustainability Officer Peter Graf in a 2011 interview whether SAP had any plans to integrate the two documents.

On a conference call at the launch of the integrated report, SAP Chief Accounting Officer Christoph Hütten went to great pains to stress that this wasn’t merely the content of both reports in one, but that the content was very tightly bound together. The report demonstrates how connections and inter-dependencies between financial and non-financial performance impact each other, he said.

The document/website contains all the financial and sustainability-related information you would expect to find in reports of this type. And the report also has a nice page showcasing and explaining the connections between the financial and non-financial performance.

Other nice features of the report are an integrated tweetstream showcasing mentions of the #sapintegrated hashtag on some pages, an option to make notes on pages (with the ability to download those pages as PDF’s subsequently), and the download centre for downloading the annotated pages, as well as financial statements, graphics and other reports.

For the first time also, SAP are releasing their 2012 sustainability information in XBRL format (.zip file) – something GreenMonk also suggested to SAP back in 2011. If you are unfamiliar with XBRL, it is an XML-based global standard for exchanging business information.

Impressive as well was the fact that at the end of the conference call launching the report, Peter Graf mentioned that SAP are actively looking to co-innovate. He asked that anyone, be they in the financial or sustainability reporting space, who is interested in integrated reporting get in touch with him to work together to bring integrated reporting to everyone “at the lowest possible cost and highest possible precision”.

The video above is a demo of the report and I have placed a transcript of the video here.

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IBM’s mobility play: MobileFirst

March 12, 2013 by Tom Raftery

One of the big talking points at this year’s IBM Pulse was IBM’s recent unveiling of its new platform for mobile, MobileFirst. My colleague James covers the announcement in details on his RedMonk blog, but I thought I’d talk a bit about the GreenMonk perspective, as we haven’t covered mobile here very much to-date, and it is becoming increasingly pervasive.

Mobile is now huge. I know this is self-evident, but it is totally game-changing. Now everyone is instrumented, interconnected, and intelligent, as IBM themselves might say.

What does this have to do with sustainability? Well, we here at GreenMonk take a broad view of Sustainability and as we noted in our write-up of the Pulse conference, IBM’s Smarter initiatives all play to a sustainable agenda. Sustainability is all about doing things more efficiently. Mobile definitely enables that.

You only have to think of the application IBM rolled out last year to help staff and students crowdsource cleaning up of the Los Angeles Unified School’s District. And, it is also making a big splash in the Enterprise space, as witnessed by SAP’s Operational Risk Management mobile app; the ESB and IBM mobile app to help finding and scheduling charging of electric vehicles in Ireland and many similar initiatives.

And there’s also social – I wrote a blog post last November about the intersection of big data, social and sustainability. What does this have to do with mobile? Well, in each of the examples outlined in the blog post, a significant amount of the data would have been entered via mobile. People as sensors. The internet of everything.

There are lots of other examples in healthcare, smarter cities (the Boston mobile app I mentioned in this post), education, etc.

The one place IBM may be missing a trick in mobile? Mobile endpoint energy management. IBM have an endpoint management app for mobile, but it’s focus is more on security than energy management, but, as we’ve noted here previously, battery life is a significant pain point for mobile users. A user whose device is out of battery, is a frustrated, disconnected, unproductive worker.

An Endpoint Management solution which manages mobile battery life (by having low power modes, or by automatically shutting down all but the frontmost app, or similar, for example) would be a definite win for any enterprise.

Full disclosure – IBM paid travel and accommodation for me to attend Pulse.

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Can we hack open source cloud platforms to help reduce emissions – my Cloudstack keynote talk

February 18, 2013 by Tom Raftery

This is a video of me giving the opening keynote at the Cloudstack Collaboration conference in Las Vegas last December. The title of my talk was Can we hack open source cloud platforms to help reduce emissions and the slides are available on SlideShare here if you want to download them, or follow along.

Be warned that I do drop the occasional f-bomb in the video, so you might want to listen to this with headphones on if there are people nearby with sensitive ears 😉

And I have a transcription of the talk below:

Good morning everyone! I’m absolutely astounded of the turn out at this time on a Saturday morning. I said to Joe yesterday evening, I think it was, that I reckoned it would be just me and the AV guy here this morning but now you’ve turned up. That’s a fantastic, phenomenal. Thank you so much. I hope we make it worth your while. My talk, Joe mentioned I’m from RedMonk. RedMonk is an analyst firm. I work on the green side of a house, so I’m all about energy and sustainability. I’m talking about using open source cloud platforms to measure and report energy and emissions from cloud computing.

A couple of quick words about myself first. As I said, I lead analyst energy and sustainability with RedMonk. You can see there, my blog is on greenmonk.net. My Twitter account is there. My email address is there. My phone number is there. Please don’t call me now. I’m using the phone as my slide forwarder. SlideShare, I’ll have this talk up on SlideShare shortly.

Also, a couple of companies I’ve worked with. I worked to the company called “Zenith Solutions” back in the mid-’90s. It’s a company that I set up in Ireland. As we called it at the time, it was a web applications company. Web applications at that time morphed into SaaS, “Software as a Service.” Back in the mid to late 90s, I was setting up these Software as a Service Company, so I knew a little bit about cloud. Then Chip Electronics was an ERP company, but it was a Software as a Service delivered ERP. That was around 2002. CIX, the other company that’s there.

CIX is a data center company that I founded in 2006 in Ireland. I kind of know a little bit about cloud both from the software and from the hardware side. I’ve setup a data center and I’ve also setup software companies dealing with cloud stuff. Like I say, a little bit of the background in it. I know what I’m talking about, not that much, but I’ll bluff it.

This is a report. It’s a graph from a report that came out just a couple of weeks ago. It’s from WSP Environmental and the NRDC. Basically, what they’re saying in this report, it’s a long report, the link is at the bottom there. As I say, this talk will be on SlideShare, so you can link on the link in SlideShare and get straight to the report. What the report is saying basically is that cloud computing is green. There have been a couple of reports like that which have said that. Most of them have been tainted before now. There was one that Microsoft helped put out, obviously Microsoft have got a foot in the game so you kind of wonder about that one. There was another one that was put out by the Carbon Disclosure Project, but it was paid for by AT&T. That was highly suspect. This one’s actually quite good. They’ve done quite a bit of work on it. You actually have to take it seriously unlike the previous two and it does seem to suggest that cloud computing is green, and that’s good.

Previous ones, as I say were suspect. The issue with this that I have and it’s a small issue, but this issue or this report is a really good report but it’s speculative. It says cloud computing should be green. Probably, is green. Maybe green, but they’re not working on any hard data and that’s where we’ve got a serious problem with cloud computing.

Taking a step sideways for a second, this is a guy called Garret Fitzgerald. Garret Fitzgerald was a politician in Ireland in the ’80s and ’90s. He died last year. A very unusual politician because he was one of the very few politicians who actually have integrity, very well-know for his integrity. He was also not just known for his integrity, but he was an academic. He came from an academic background. He worked in Trinity College Dublin as a statistician, so he was a data guy.

Now, in the mid-’40s, the Aeroflot, Russian Airline Company, it was at ’47 I think or ’49, for the first time, published their flight schedule. They’d never done this before. They published their entire flight schedule, their global flight schedule. Garret Fitzgerald looked at this, analyzed it and figured out he could know by going through this in detail, he could figure out the exact size of the Aeroflot fleet down to the number and types of planes they had in their fleet, and this was a state secret.

This was nothing that had ever been published before, but by analyzing their schedules, he worked it out and he published it, and as a result, the KGB had a file on him because they thought he was a spy.

Two things about this slide, first is you do a creative common search on Flickr for KGB, and this is one of the images you’ll find. It’s got a KGB logo and his got a cat, so you got two memes right there. A, the internet is fucking awesome and B, well the main thing to take away from this is that there is no such thing as security by obscurity. Hiding your data will not work. Somebody will figure the damn thing out. That’s where we’ve got a big issue with cloud computing because there is absolutely no transparency in cloud computing.

This is a blog post that I’ve put up. If you follow greenmonk, which is where I blog at greenmonk.net, you’ll find there’s a ton of blog posts on this very topic, the lack of transparency in cloud computing. I have done blog posts about it. I’ve given webinars about it. I’ve hassled people about in the space. The SalesForces, the Rackspaces, I’ve hassled them all.

Recently, the New York Times picked up the story. I’m not going to say it has anything to do with me, they actually run a really good story. Again, the link is at the bottom there. One of the things that they have mentioned in that story — please do go and click on that link and read that article. It’s a really good article.

One of the things they have mentioned in that article is a McKinsey study. In that McKinsey study, they say that globally for data centers, somewhere between six percent and 12%, depending on the data center, somewhere between six percent and 12% of the power going into the servers in the data centers is used for computing. The other 88% is used for elasticity. It’s used to keep them going in case there’s a burst of activity, so 88%, if we take a conservative look, 88% of the power going into those servers is the E in Elastic Cloud, horrific waste.

Do you think that people’s often mistake in this area, is people often equate or conflate energy with emissions, and that’s a mistake. They are not the same thing, not at all. The reason they are not is because if you take the example of — for example, the Facebook Data Center in Prineville, Oregon, a fabulous data center. They’ve opened sourced it, the whole open compute project. They’ve opened sourced the entire building on this data center.

The data center, if you know anything about data center statistics, there’s a metric for data centers called the PUE. The PUE is the Power Usage Efficiency. The closer you are to one, the more efficient you are. Facebook’s data center comes in around 1.07 or 1.08, depending on time of the year on usage and stuff like that, but it’s in and around 1.08. It’s almost unheard of efficiency, 1.5 is kind of average, 2.0 is older data centers, and 3.0 is dirty. This is 1.07 or 1.08.

Unfortunately, although it’s extremely efficient — this is Facebook’s numbers here, 1.08 plus their computing power has declined by 38%, but the problem with that is, this data center is powered by company called PacifiCorp. PacifiCorp are the local utility in Oregon, in Prineville where this is based.

PacifiCorp mines 9.6 million tons of coal every year. It doesn’t matter how efficient your data center is. If you’re mining 9.6 million tons of coal to run your Facebook data center, it’s not green. I don’t care how efficient it is. It’s not a green.

It’s not just Facebook, it’s not just Prineville, Dublin, in Ireland, I’m Irish — guilty. Dublin has become a center for cloud computing as well. All of the big companies are there. Microsoft is there, they got their big Live servers there, Google are there, Amazon are there, they’ve all got data centers there. Ireland, unfortunately, gets 84% of its electricity from fossil fuels. Again that’s not very green. It’s not just Ireland, the U.K. is another big center for cloud computing in London, and again, over 90% of the electricity in the U.K. comes from fossil fuels. This is really, really bad stuff.

Now, if you look at this chart, this is why I say that the PUE which is in the middle column here, isn’t a whole lot important because as I said, if you look at the bottom row there, it’s got a PUE of three I said that was really dirty. Top row, PUE of 1.5 is at the average, middle row PUE of 1.2 kind of in the middle, but if you look at the power source coming into these putitive data centers, so your typical one, the top line, typical one has a supply carbon intensity of half a kilo per kilowatt hour, that’s pretty standard. If that has a data center PUE of 1.5, then you’re getting simple math, 0.75 a kilo per kilowatt hour. If you have a good PUE of 1.2, but with coal fired power coming at 0.8 of a kilo per kilowatt hour, you’re now looking at IT carbon intensity of 0.96.

Look at the bottom line, a PUE of three, one of the dirtiest data centers you can get, but it’s powered almost all by renewables, it’s not all because it’s got a 0.2 kilograms and a PUE of three, it still comes in at an IT carbon intensity of 0.6, which is far better than the 1.2 PUE or the 1.5 on typical. The take home message from this slide is that it’s the source of the electricity is what determines the carbon footprint of your cloud, not the efficiency of your data center.

Now, if we look at some of the cloud providers that are out there today and if I left anyone out, apologies, I just stuck these logos up based on the availability of the logos. It’s not an any kind of research or anything but that.

If we look at the cloud providers that are out there, these ones are semi-clean. If we look, for instance, at Rackspace, they have a data center in the U.K. which they claim as 100% powered by renewables. Now, they haven’t given us a whole load of data, but let’s just take the word on it. If you go with Rackspace and you go with their U.K. data center it’s supposedly 100% green, we’ll see. Google, Google have done a really good job on investing in renewables. They spent almost a billion dollars on buying into Windfarms, power purchase agreements with big Windfarms the whole thing. They’ve gone out on a serious limb, in terms of renewables. I’m pretty positive about them. They’re still doing a lot of the old buying carbon credits and stuff like that, but they got old data centers that they need to top up with carbon credits.

Green Cloud is an interesting one. Green Cloud are company that bill themselves as an AWS replacements, dropping AWS replacement and why they are cool is because — pun intended.

They’re cool because they’re based in Iceland. The electricity grid on Iceland is 100% renewable, its 30% geothermal, 70% hydro. The entire grid is a 100% renewable energy and it’s baseload energy and what’s even more interesting about it, as a grid is, there are 300,000 people living in Iceland, that’s it — 320,000. They’ve realized that they got this energy infrastructure and way more energy than they can every use, so they decided to invite people who need lots of energy. I’m not talking about data centers. I’m talking about Aluminium Smelting Plants.

So, they got Aluminium Smelting Plants in Iceland. These guys take up 500 megawatts at a time. A big data center is 50 megawatts. They’re 10 times the biggest data center you’ve ever come across, in terms of the power utilization. They are on all day, everyday, 24/7, 365, it’s a flat line. Any electricity grid you look at, if you look at the demand curve, it goes like that everyday. Peaks in the morning, when people get up, peaks in the late afternoon when people come home from work. Iceland, the flat line all the way. It is the only country whose electricity grid is just flat all the time. It’s always on. It’s always flat. There is no movement in it or whatsoever. It is the most reliable electricity grid in the world. It’s also one of the cheapest. It’s also 100% green.

If you are looking to site a data center, I recommend Iceland. Greenqloud are based there, and as I say, their Cloud is obviously 100% green. We’ll come back to them.

Amazon put out this report earlier this year where they said that, “Both their Oregon and their GovCloud were a 100% carbon free”. That sounds nice. Unfortunately, when you actually ask them about it, so this is Bruce Durling, a guy I know in the U.K. He asked Jeff — it’s a story for this 100% green claim that it’s just going out. Jeff says, “You know, we don’t share any details about it, but I’m happy to hear you like it.” Bruce comes back and says, “How can we verify if this is true, there are lots of different ways to claim zero carbon.” And then you’ll just hear cricket chirps, nothing, no data, and no response. Bruce isn’t the only guy, several people took Jeff up on this asked him, “What’s the story with your claim for 100% green in these two clouds? “Nothing, nothing.” And it’s appalling that they are not talking because this is the kind of stuff we need to know. There is no data coming at of a lot of the cloud manufacturer or cloud providers.

Looking again at the cloud providers I’ve mentioned, if we look at some of the ones who are providing some data. If we look, for example, at SAP, SAP has got a really good sustainability report that they release every year. In fact they release quarterly even better. Unfortunately, the only data, they give us about their Cloud, is that eight percent of their carbon emissions are from their data centers. That’s as granular as it gets. We know no more about their carbon emissions, about their Cloud than that.

If we look at Salesforce, Salesforce go a little further. Salesforce have got this carbon calculator under site which is interesting. If you choose as I did in this screen shot, you can see I chose — I was based in Europe which I am. I decided to say I was in a company of 10,000 plus, and I decided to say, “Look, I’m going from on-premise to Salesforce. So, they tell me, “Fantastic! You’re going from on-premise, 10,000 plus based from Europe you’re going to save 86% and 178 tons of carbon by moving to Salesforce, but of course that’s complete horse shit because Europe is not homogenous.

If I’m based in France, 80% of the energy in France is nuclear. If I’m based in Spain, which I am, 40% of the energy in the Spanish grid comes from renewables. There is no way that if I move my on-premise from France or Spain to Salesforce that I’m saving 178 tons of coal per annum. In fact, if I move to Salesforce, my carbon emissions are going to go up not down because Salesforce’s data centers are in the U.S. which is 45% coal or they’re in Singapore. Singapore is — if memory serves 93% fossil fuel so there is no way moving to Salesforce from a lot of the European countries is a step on the right direction in terms of green.

The other thing that they have — you can click on the link at the bottom of this as well on the Salesforce site. This is where they have your daily carbon savings. There are two problems with this, the first is — this screen shot was a couple of days ago and you could see they’re talking about the 13th of September is the most recent date, so it’s two months or more out-of-date. The second is they’re talking about carbon savings, which is bullshit made-up number. What they should be talking about is actual carbon emissions because they can just make up the carbon savings because it’s basing where you’re from. Like I say if I’m in Spain and my carbon savings are at a zero going to Salesforce. They should be talking about emissions not carbon savings of completely the wrong metric.

I talked about Greenqloud. Greenqloud, have this on their site which is nice. You log into Greenqloud — over the righthand side is part of your dashboard, you get your carbon figures. They are as well, and this is a conversation I’m having with them at the moment, they are also talking about the CO2 savings, they’re not talking about actual emissions. There are emissions obviously, if you’re working with Greenqloud, their CO2 footprint is negligible because it’s Icelandic, but there is that carbon expended between your laptop or your desktop and going to them. There is carbon put out there but it’s negligible compared to mostly of the other providers. The difficulty with this, as they say, is they’re talking about CO2 savings not CO2 emissions. I’m hoping to get them to change that.

Why don’t the Cloud providers provide this data? There are number of reasons. I’m speculating here. I don’t know. I’ve asked them, they’ve all said different reasons. One of them I’m going to think is competitive intelligence. They don’t want people to know what their infrastructure is. They don’t want people to do the Garret Fitzgerald and reverse engineer, to find out what it is they’re actually using to power their facilities. Another is maybe they don’t actually want people to know how much CO2 they’re pushing out. It’s not a happy story.

The other is, in fairness, there’s a lack of standards out there about cloud companies reporting emissions because how do you report emissions around cloud computing? Do you do it at CO2 per flop? What’s the metric? We don’t know, no one is doing it yet so we don’t know.

Peter Drucker, the management guru, is famous for saying, “If you can’t measure it, you can’t manage it.” That holds true. That does hold true for everything, and particularly in this space.

I’m going to go through a quick recap of 2012 and this is not going to be pleasant. This is an image taken from the U.S. Drought Monitor in September but it’s even more so now. So far, U.S. agriculture has loss $12 billion just in Q3 because of drought. It’s not just drought, there’s been massive wildfires globally, not just in the U.S. There’s been massive floodings everywhere, not just the floodings, but also a new report came out in the last week, and again the link is at the bottom, which says that, “Sea level rise globally is actually 60% higher than had been previously calculated.” They had thought sea levels were rising two millimeters per annum. It turns out sea levels are actually rising 3.2 millimeters per annum.

We have had more than 2000 heat records in June alone of this year in the U.S. alone, the sea ice — I got a chart here, you can look it up afterwards. I’ve got another chart here you can look it up afterwards, and I got an image here. It’s hard to see, but that’s the polar ice cap in September 13th when it was at its minimum.

The orange line outside that is the 30-year average at that time for the sea ice extent. It’s almost 50% less than what it should have been at that time. It’s scary. It’s scary stuff because when we lose the arctic and we’ve lost 50% of it this year, when we lose the arctic, you got a feedback mechanism because when you don’t have the ice to reflect the heat, you’ll got the water taking in the heat, and it gets hotter and it’s a feedback mechanism so the ice underneath melts as well, so you no longer have multi-year ice.

You got methane emissions, that’s literally methane coming from underneath the ice from organisms that had been frozen, but because everything heated up a little bit. They started producing methane. Now, another report out in the last week in the UNDP says, “The thawing of the permafrost is going to cause us enormous problems and it hasn’t been taken into account previously in any of the climate models.” None of the IPCC reports, up until now, have taken permafrost thawing into account because they think it was going to be significant. Suddenly, they’re realizing that the thawing of the permafrost is decades ahead of where they thought it would be. This is serious stuff because this could be 40% of the global carbon emissions soon, not good. It’s a big feedback mechanism again.

So okay, the Cloud. The hell is that going to do with cloud? I get it. Cloud isn’t responsible for all these emissions. I know that, but it’s responsible for some of them, at least two percent of the global carbon emission is coming from IT and that’s a 2006 Gartner figure(ph). So, it’s likely, significantly higher at this point.

What’s that going to do with open source? Why are we here? Well, I got to think that we’ve got this open source cloud platforms out there. There are a significant number of developers in the room. I think it’s entirely possible that people in this room could start writing patches for the open source cloud platforms that are there, so that the Cloud providers no longer have an excuse to say, “Oh, we can’t do it because it’s not in the software.”

If you guys start writing the software for them, start doing the energy emissions, reporting, and measurement software writing those patches for the open source global platforms. Then suddenly, it gets in to the core. It starts being deployed back out to the companies that are using these platforms.

This is the company called AMEE. Interestingly they’re a U.K. start-up, not really a start-up, they’re around four years now, but they named the company AMEE as the “Avoiding Mass Extinction Engine.” They don’t boast about that, but that’s where they got the name. They are an open source platform for carbon calculation. They’ve got open APIs. If you guys want to do this stuff, work with the AMEE open APIs because they’ve got all the data.

Then, as I say, it gets thrown back out to the client companies of the open source cloud platforms and then we’ve get serious traction. This is what we need to have happen. By the way, there’s a company called Mastodon C. I mentioned AMEE already. There’s another company called Mastodon C out there, who has a dashboard already in place, showing us the carbon emissions of the various cloud providers. It’s not great. They’re guessing it because the cloud providers aren’t reporting it. They’re guessing it based on the location of the cloud companies and utility companies who provide them with their energy but it’s better than nothing.

One other thing I should mention and I don’t want to be totally negative, but this should scare the fuck out of everyone in this room. PricewaterhouseCoopers, not known as being green, agitators, activists, there are the largest of the big four accounting companies. They came out with this report two weeks ago. It’s their carbon report. They come out with it annually. This report tells us that between the years 2000 and 2011 globally, our carbon emissions went down by 0.8% every year. That’s good, 0.8% reduction carbon emissions year on year.

The trouble is we’ve decided we want to keep our global warming figures. We want you to cap the warming at two degrees centigrade. Beyond that, it starts to get very hairy. The temperature has already gone up 0.8 of a degree centigrade, so we’ve got 1.2 degrees left.

According to PwC, the only way to keep this at two degrees is to reduce our carbon emissions not by 0.8%, as we’ve been doing, but to reduce our carbon emissions 5.1% every year between now and 2050. Six times the carbon reductions we’ve been doing for the last 11 years, every year for the next 38 years. So, sorry to be on a bit of a downer, but I have some good news.

This is Jim Hagemann Snabe. Jim is the co-CEO of SAP. I had a conversation with him in Madrid last week about this very topic and about… they are a cloud provider, I was asking him, “Why the hell aren’t you talking? Why aren’t you giving us your numbers? It wasn’t something he was aware of, it wasn’t something he had thought about, and Jim is actually a good guy. He’s actually a sustainability guy. Anytime you hear him talk, in the first three, four minutes of his talk, any talk he gives, he’ll bring up sustainability. Maybe sideways, he’ll talk about resource constraints or something, but he’s always thinking about this. When I brought this up with him, he was blown away because it hadn’t occurred to him at all and he said, “Tom you’re absolutely right, this is a space I want SAP to lead in.” Hopefully, something will come out of that, but it’s not just that.

This is Robert Jenkins. Robert is the CEO of CloudSigma, a Swiss-based company who are a Cloud Company. I’ve had conversations with him about this as well, and he is talking again about doing this also, about opening and being transparent about their emissions, so we’re getting some traction now in the space. Finally, Greenqloud, Greenqloud’s CEO is a guy called Eiki and I’m not going to try to pronounce his surname because it’s Icelandic and it’s just completely unpronounceable. Eiki has given me permission here today, to announce on behalf of Greenqloud that Greenqloud, because they are a CloudStack customer or user, and they have this energy on emissions stuff already built-in.

In Q2 of next year, they’re going to contribute their code back into CloudStack. So, for me, I think that’s a serious win because then it gets distributed back out. For me, that was a highlight of my last couple of week’s work, just getting Eiki to agree to in Q2 next year contributing that back into CloudStack.

So, that’s it. That’s me. Adding emissions, metrics and reporting to cloud computing will help reduce emissions. That’s it.

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Cloud computing’s lack of transparency – an update

November 22, 2012 by Tom Raftery

We have been talking here on GreenMonk about the lack of transparency from Cloud vendors for some time now, but our persistence is starting to pay off, it appears!

Some recent conversations we’ve had with people in this space are starting to prove very positive.

We’ve had talks with GreenQloud. GreenQloud are based in Iceland, so their electricity is 100% renewable (30% geothermal and 70% hydro). They already measure and report to their customers the carbon footprint of their cloud consumption – so what discussions did we have with them? Well, GreenQloud use the open source CloudStack platform to manage their cloud infrastructure. Given that CloudStack is open source, and we’ve previously suggested that Open Source Cloud Platforms should be hacked for Energy and Emissions reporting, we suggested to GreenQloud that they contribute their code back into the CloudStack project. They were very open to the idea. Watch this space.

We’ve also met with CloudSigma, an IaaS provider based in Switzerland. CloudSigma were very interested when I raised this discussion with them at the GigaOm Structure event in Amsterdam earlier this year and they hope to have energy and emissions reporting ready to demonstrate very soon. In a way though, the discussions with CloudSigma went much as expected. We were after all, preaching to the converted. CloudSigma have a good environmental track record having announced that they are carbon neutral back in June 2010.

And finally, last week at the SapphireNow event in Madrid, we had a discussion about cloud providers lack of transparency with Jim Hagemann Snabe, co-CEO of SAP. Jim is an interesting guy. We’ve been covering SAP events for several years now, and every time we’ve heard Jim get up to speak, within the first few sentences he references resource constraints and sustainability. He drives an electric car. He’s totally bought into being green. He’s also a proponent of transparency. So when we raised the issue of the lack of transparency with Jim, his eyes light up and he got all excited. We had a great conversation on the topic which he concluded by saying “I want SAP to be a leader in this space”.

All very positive stuff, still no actual movement but things appear to be going in the right direction.

Image credits Tom Raftery
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GreenMonk Sustainability Customer Reference series – Sika

September 11, 2012 by Tom Raftery

This is the fourth video in my Sustainability Customer Reference series project. The project involves my talking to SAP customers and asking them about the sustainability solutions they have implemented. In this video, I talk to Dr Hubert Norz of global specialty chemicals firm Sika about how they use SAP solutions to stay compliant with safety regulations, like the European REACH directive.

Here’s the transcription of our conversation:

Tom Raftery: Hi everyone, welcome to the GreenMonk Sustainability Customer Reference Series sponsored by SAP. With me I have Dr. Hubert Norz from Sika.

Dr. Norz can you tell me a little bit about Sika as an organization and then your role within Sika?

Hubert Norz: Okay, Sika is one of the global players in the area of specialty chemicals. We are in the construction market and in the industry. For construction market we produce mortars, admixtures, sealants, adhesives, flooring products, and products for roofing and roofing systems for example to fix solar panels in roofs.

Tom Raftery: Okay and your role within Sika?

Hubert Norz: I am responsible for product stewardship within the Sika group and I have second role in the company of Sika Germany, I am responsible for the management systems that means environmental management, there’s some quality management, safety management and a very new initiative concerning sustainability that’s energy management.

Tom Raftery: So how does SAP help you with those jobs?

Hubert Norz: Sika uses SAP across the organization. And in my area product stewardship we use mainly SAP EHS. SAP EHS helps us to create safety data sheets to comply with transport rules for dangerous goods management. We produce our product labels out of the SAP system and we use SAP for the recycling of our packaging materials.

Tom Raftery: And what’s the requirement for using a system as complex as SAP for producing something like a label?

Hubert Norz: The labels contain all the safety information you need by law to be compliant and the information concerning specific aspects like CE marking, like recycling logos, we have more than 100 different certification and rule specific logos in the SAP system which will be put — right label for the right product.

Tom Raftery: So you mentioned recycling, how does SAP help you with that?

Hubert Norz: For example Sika has a huge variety of packagings and for each different fraction of different material, you have to pay a different amount for the recycling material. And SAP helps that using a real module to calculate different parts, the weight of the different parts, the cost for recycling for the different fractions, different materials to do the total calculation for the packaging recycling which is mandatory by law to do that.

Tom Raftery: Okay and you mentioned transportation rules, what’s that about?

Hubert Norz: If you ship products to your customers — there are very specific rules and you have to comply with that rules for safety on roads, safety in the air transportation. SAP provides the possibility to — or to provide the information for a customer and to create all kinds of reports on the delivery papers for orders of the products et cetera.

Tom Raftery: And how are you going to handle REACH legislation?

Hubert Norz: We use SAP EHS in a extended way to comply with the chemical legislation REACH in Europe. And we are on the way to enhance the SAP EHS system with SAP REACH compliance engine and hence the substance volume tracking module, which we are convinced — it’s the only thing in our area to enable us to fulfill these requirements.

Tom Raftery: So how are you finding the SAP services?

Hubert Norz: We are working since — so many years together with SAP, since the early 90s. And in my area SAP EHS, we appreciate very much the flexibility and the expertise of SAP. And in the past — the requirements we had SAP tried always very hard to fulfill and we were very satisfied.

Tom Raftery: So finally what are your plans for the SAP product set going forward?

Hubert Norz: After the rollout in many countries like Switzerland, Germany, Austria and North America, we’ll extend the new SAP template all over Europe. That means the next rollouts will be for our companies in UK, Czech Republic, Slovakia and Hungary, following by France and Italy. And all other European companies will follow soon.

Tom Raftery: Great, fantastic thanks a million for coming on the show.

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GreenMonk TV Moderated Sustainability ScreenCast on Operational Risk Management with SAP’s Jeremiah Stone

September 4, 2012 by Tom Raftery

As a new product for clients, GreenMonk are now offering moderated screencast videos – the inaugural one is with SAP’s VP of Sustainability Solutions, Jeremiah Stone. In this screencast Jeremiah and I discuss Operational Risk Management, what that has to do with sustainability, how SAP are moving from systems of record to systems of engagement, and seven minutes into the video, Jeremiah gets out his iPhone and iPad and gives a really cool demo of how their software can be used in the field.

Here’s the transcription of the screencast:

Tom Raftery: Hi everyone, welcome to GreenMonk TV. We are doing a moderated screen cast with Jeremiah Stone from SAP.

Jeremiah is VP, Sustainability Solutions. So today we are going to talking about operational risk management. Jeremiah could you first of all give me a quick intro on why you think operational risk management has anything to do with sustainability?

Jeremiah Stone: Hi Tom good morning. Thank you for having me on GreenMonk. I am a big follower and I like what you guys do. So it’s really a lot of fun for me to come on with you.

When SAP has worked with our customers, and we have a customer base in manufacturing of close to 30,000 customers, the common thing that comes back to us is that companies are engaged and interested in running more sustainably and that means using less energy, it means producing less emissions. It means recruiting people for the long term and making sure that they can adapt to changing labor conditions and changing demographics.

But there are sorta some prerequisites before people or companies can be successful with that and one of those is to cut operational losses and also to be able to adapt and change within their operations because often these factories, these plants, these operations are sort of steady state designed entities where they are very static and they are not really amenable to change.

Tom Raftery: What kind of operational losses you are referring to Jeremiah?

Jeremiah Stone: Well Tom it’s easy to think about the types of catastrophic accidents that happen throughout the world I think the Gulf oil spill is something that people think off, Bhopal thirty plus years on is still high in people’s minds. So those sorts of process safety incidents, we regrettably had a fire here in the California Bay Area not two weeks ago up at the Richmond Refinery.

These things happens, sort of, every day and what we are seeing is that as manufacturing operations and manufacturing I think of oil and gas, I think of utilities, I think of mining, but even transportation logistics air planes that sort of thing. We’ve built these systems that are very complex and sophisticated but they are not very change friendly.

So, to change them, they need to change, they need a radical change for sustainability purposes they need to have systems in place whereby you can change and continuously improve the static designed system whether it’s an energy refinery or a transportation network without having accidents, without hurting people, without creating environmental spills, et cetera. And we find that our customers are fundamentally lacking that ability.

Tom Raftery: Okay, tell me something so about or — tell me about this operational risk management solution that SAP have.

Jeremiah Stone: Okay, well maybe first we can start with what we just talked about and saying that what our customers are asking us for.

Our customers are asking us to help them innovate their operations and become more sustainable and really what that has boiled down to when you dig into it with customers is that they typically have environment health and safety management programs.

However, they really run at an individual operational entity level and so it is difficult to compare different factories, it’s difficult to compare different operations, and it’s very difficult to get proactive and move beyond very reactive, “oh no an incident happened how do we deal with that?” setting. But rather identifying risk before it turns into an incident and dealing with it.

You cannot remove risk from these operations but you can manage them. And that’s really what our customers are asking us for. And when we — we’ve gone out and we’ve worked with I think close to 50 co-innovation customers now and working with means going with our teams into their operations interviewing people throughout the company and determining what the problems are and where software can help.

What we found consistently is that it’s an information flow problem. It’s an information flow from the corporate level where the purse strings are, the ability to spend money down to the individual level and some of the problems we find is that there is a really strong and meaningful commitment to safety at the corporate level in the boardroom, however it’s very difficult to understand where to spend the money, because you have this very large sophisticated operations and it’s difficult to know where to make the investment and getting beyond a better laminated sign on the chain link fence outside the operation is tough.

And then when you get to the operational level oh gosh, every — these days margins are razor thin, the current economic situation most of your line level management or leaders are really focused on hitting outcomes, hitting on, hitting their targets. And they may be in a position to make bad decisions, here we say can we put in a bigger pump to increase production, well if you put in a bigger pump how do you know that in your, in your facility that’s not going to burst a seal somewhere?

That’s really standard process safety management, but doing that in a consistent repeatable way successfully is rather difficult and then at the individual worker level understanding the operational environment in knowing how to behave, take the right processes, be safe is a challenge, but we are completely missing the inbound engagement conduit if you will, when they see something wrong how can one, an individual worker if they see something wrong report that.

All to often, when there is a problem and we do an investigation after an incident, well gosh the workers who are in that environment knew that there was something wrong, they didn’t have a means to communicate.

Tom Raftery: Okay, so how do you fix that?

Jeremiah Stone: Well there is a lot of discussion these days in the enterprise software community moving from systems of record to systems of engagement and this is something we focused quite a bit on and I like to show you a couple of applications right now where we are taking what would be a typical approach to a system of record to identifying a risk, which would be sort of one of SAP’s typical enterprise applications at a specialist enterprise health and — environment health and safety management professional level and moving that both directions.

And so if we look at this you could imagine that you are going to have your EHS professionals that are site level managers but they are the only ones that really have that information today and they don’t have a means by which they can push that information up to corporate nor do they have a means where they can gather at large scale that information from the workers.

And what I’d like to do is that I’d like to show you how we are addressing that today in terms of a mobile application. So I am going to share with you now my iPhone. Hopefully this, comes through, can you see my iPhone?

Tom Raftery: Yep.

Jeremiah Stone: Okay, so what I’d like to do is I’d like to show you our safety issue application. Our safety issue application, let me back out of here, this is the entire application and so we are trying to really take a note out of consumer design and have one screen application without lots of tabs and drill through menus. And we have designed this application around the, “if you see something, say something” design principle and actually John Astill one of the mentors has worked on this app, that’s part of his sustainability activities.

And I’ve got a example here, I raided my son’s toy chest this morning, and just to give you an example here. You can imagine here is our little repairman out in the setting. And he notices there is something wrong with this hauler. Rather than walking all the way back to the shop, he can simply take a picture of what’s wrong with the hauler. He can say okay, I am going to use that photo, he can press the record button here and record description of what’s wrong, I am not going hit that record button because then you loose the screencast. Maybe enter quick description here, “Axle wearing too quickly on hauler,” accept that description and then simply submit the safety issue.

And so you can see there that in a few seconds we have gone from seeing something wrong, recording a description with audio and then and then sending that off to the safety experts and this is uploading like it would to YouTube or anything else. And what you haven’t seen me do is enter my name, or enter where I was, or any of those such things because we are using location based services, we are using the enterprise backbone to say who saw the thing that was wrong, where are they, et cetera.

And because we also have the entire asset infrastructure in the background, we can similarly then say, oh well actually we know which truck that was, because we have near field communications et cetera. So that’s how you get more information into the system.

Tom Raftery: But nobody ever reads these reports, do they?

Jeremiah Stone: That’s an interesting point. Now imagine you are in this world where you drop the hey I saw something wrong into the box on the wall or you submit that paper issue, how do you know what happened if you were the person that reported that. I am glad you asked that because as you can see here we have the ability to capture the safety issue, but we also have this button here that says my issues.

So if I click into that my issues what’s it’s going to do is it’s going to look for every issue that I have submitted. And I can drill in, and I can see the real time status on that issue and if it’s being worked on or not. So now I am creating mutual accountability with the safety organization, you say nobody every reads that, well guess what, you would actually know if anybody had ever, ever read it, because we are tied into the core SAP system in the background.

And now there has been a workflow sent to the responsible safety mentor and we are are using that enterprise backbone now to facilitate communication.

So, now, rather than dropping that paper form off or submitting a form, it just goes into somebody’s inbox, now we are using much, much the same in any kind of social media. We are using mobility and social media now to push that information to the responsible safety person and along with a GPS of where we are, okay it’s not picking up, but well I think I must be in my Faraday shielded office here. But, this would then be picking up my my GPS, it would also be passing out through to the application. So now the safety manager and the employee have a relationship driven by the application.

Tom Raftery: But now the safety manager has gone from receiving one notification every three months to receiving 300 everyday.

Jeremiah Stone: That’s correct.

Tom Raftery: How does he work with that or she?

Jeremiah Stone: Well I’m not going to drill into that right now, but that’s the thing we’ve always been really good at, at SAP is how to deal with the large volumes of data. And so we have the ability to sort, slice and dice this information coming in, we have heavy duty analytics to show trending, to hot spot on the basis of the information put in. We also have as you see here this little flag, immediate action required, yes or no to help to raise it or lower the priority.

And our safety manager tells us hey that’s okay, my problem in the past was really a lack of data, not too much data and I want more data. There is a well known, in the industr,y sort of a ratio between near misses to incidents, its about 300 to 1, about 300 observations or near misses to an individual incident. And if you actually go into the day to day — any of these companies and they say, oh you know, we had 100 reportable incidents but we had 6,000 reported near misses.

Well they are usually quarter, a couple of orders of magnitude off between an observation or near miss and an actual incident. And so these professionals actually want more data not less.

Tom Raftery: Cool.

Jeremiah Stone: And we give them the tools to deal with that data, but now I’m going to show you how we expose that data to people who aren’t used to dealing with that data and that’s that upper level of management that I talked about before.

So that upper level of management, who is not giving any data at all, if we were to throw 300 observations at them per day, they wouldn’t have any idea what to do with it. But if we take those people who are good at dealing with the area and we expose the output of their analysis to upper management in a mobile device as you see here in a way that they can consume it, we can get better investments.

So what you’re seeing now is incident root causes and so somebody would have entered a safety observation with the iPhone app on the left and then there is a safety professional in between who has processed that, done an investigation, identified root causes.

Now we have the ability, let’s say your upper management are rather visual learners, I can drill in here to a word cloud and rather than looking at this with boxes and rows et cetera, we can expose the root causes to management or other users, let’s say you’ve got people coming into the organization now that are not used to looking at spreadsheets their whole life but they are used looking at Tag clouds or something that you get online and we can give them their information in a way they can consume it.

And so here we can see okay we’ve got a training problem, but let’s just say for the sake of argument that we’ve got a non-millennial here looking for the root causes and they want to look at a pie graph and then they want to say okay well I understand the root cause, but I understand what injuries have been happening.

So I’m going to add another dimension here, so now I’ve taken my route causes along the bottom here; defective equipment, lack of training, we still see that spike on lack of training that we saw before but now we’ve added that body part that’s been injured and now I’m just going to sort by occurrences.

So now we can see we’ve got a — main root cause is lack of training and we have arm injuries. And so the probability here is that we’ve got new equipment, we can dig a little bit further, we probably have new equipment in the setting and people are getting hurt by that.

We talk about environmental spills, we talk about explosions but big problem with sustainability is it’s also how you’re treating your labor force and the long-term consequences of what we maybe perceiving as smaller incidents, but let me tell you if you lose a finger, you lose an arm that’s a catastrophic incident to you as a worker.

So, we want to be able to help with that as well, and also from an employer point of view, your long-term liabilities with regard to workers compensation, et cetera, and what’s great about this app is we know that managers work in primary in email, well I can now send this to let’s say my safety manager, update training and go ahead and send that off and I can go ahead and you know I’m really amazed I should have you in there.

Well and anyway I can send that off to you Raftery at Greenmonk or whatever and then what this would give you is all of the data but also that graphic and say okay let’s look at this data I’m looking at, let’s work on this together.

So we’re really trying to move from what would have been a system of record approach to safety and risk, to a system of engagement approach by pushing out the ability to identify risks, here we can see we can take a picture there, the ability to identify risks in the operational setting and also the ability to understand what those risks are and take action at the management level.

Tom Raftery: And what kinds of industries would typically be interested in solutions like this?

Jeremiah Stone: So that the types of industries we tend to work with in solutions like this tend to be what we refer to as asset intensity industries, so these are industries that have lots of trucks, planes and also large equipment and they are high risk. So you typically think of oil and gas, both upstream on the exploration and production side and downstream on the refining side.

Also think of any type of large construction, so we’re staying in the energy field here, you could do a thing of utilities, what some people refer to as large construction companies with generation capacity. And anybody who is going to be putting up say a windmill farm or solar, et cetera, it’s going to be a same challenge here in terms of people in it and with lots of stuffs moving in, lots of heavy machinery, mining, mill, production.

I mentioned utilities, that also would include utilities like phone, et cetera and then transportation logistics, think of your airlines, US, FedEx, US Post that sort of thing. There is definitely a large demand in those types of industries for this, because they are large far flung organizations where training is a big deal, they are very fast moving and risk is also a big deal and so you see the potential to have major issues there.

Tom Raftery: And what about the current economic climate, is that impacting on sales?

Jeremiah Stone: I’d say it’s driving sales even more quickly. We’re seeing in this portfolio about a 35% compound annual growth rate over the last three years since the crisis onward, and that’s because companies are becoming even more loss averse in the current environment.

So it works both ways, when you’re trying to grow and you are investing you don’t want to have incidents because you want to be fast and agile to market, but also when you’re concerned about potential production stoppages or issues with regards to your liability, say an environmental spill or people spill or people incident, you want to control that as well, and so it’s really a cycle proof investment area in that sense, because it’s both something you need when you’re growing quickly and investing and something when you are at more of a steady state and you’re looking to control loss.

Tom Raftery: We are coming on time to wrap up now, just one last thing, where do you see things going from here?

Jeremiah Stone: Well what we’ve done today is we’ve taken our portfolio as we have it and as I mentioned we have these base capabilities in your incident management risk assessments, workers safety management, management changed and we’ve moved these into more systems of engagement at both the individual worker level and the corporate level.

Where I believe we are is we barely built the foundation for what we can do here, and the next step will be utilizing our abilities to deal with big real time data and so not just having the intelligent sensor of the human pushing data in, but imagine the internet of things pushing information into a system like this and then imagine taking predictive analytics and start to not only identify a risk when we see it from a professional point of view but now put algorithms at that.

Let’s point R at that from a particular algorithm point of view and start to identify latent and hidden risk in our operations. We can have predictive safety as well and then just have to utilize our assets as well in the cloud, so for example the recent success factors, acquisition, you’ll notice something that you don’t see on the screen here is training, qualifications, ongoing learning, informal learning via collaboration.

The true moving the system engagement, we should be utilizing Jam here from SAP to help grow communities of practice and communities of expertise around safety across companies and across even value chains and we’re starting to see that as well, so I think we’ve really barely taken the first step with what we can do here.

Tom Raftery: Well, fascinating. Jeremiah that’s been great. Thanks a million for talking to us today.

Jeremiah Stone: Thank you so much Tom. Bye, bye.

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