German IT Goes Green

Digitalization can be both a curse and a blessing from a sustainability standpoint. On the one hand, information technology makes companies more efficient. On the other, IT itself consumes a lot of energy. More and more firms are therefore investing in sustainable options.

February, 2022

The new data center of IT specialist Equinix in Frankfurt heralds a new era. Inside the building – whose exterior is covered with plants and greenery and features a roof garden – energy-efficient, high-performance computers hum, and fans supply the building with cool air. This low-energy building is intended as a model for the other 65 outposts of the US parent company, which has pledged to become climate-neutral by 2030.

Data centers house vast numbers of servers and routers and consume huge amounts of energy as well as releasing heat. The all-encompassing advance of digitalization means the amount of data and with it the energy consumed is growing exponentially. This can outweigh the environmental benefits of “going digital,” including measures like saving paper or streamlining operations.

Equinix’s state-of-the-art, low-energy data center in Frankfurt, which is covered in greenery, cost the US company EUR 110 million.

© Equinix

The result is a new niche known as green IT. “This market is growing in Germany,” says Niklas Meyer-Breitkreutz, expert for digitalization and sustainability at the industry association Bitkom. “Companies that bring digitalization and sustainability together have a competitive advantage in the German market.”

Software and hardware

In May 2021, in a global survey of 1,000 companies with annual sales of more than USD 1 billion, Capgemini Research Institute found that over half (52 percent) believed that tech corporations should take sustainability into account in their products and services. One way to do that is to develop effective software that uses less computing power: 45 percent of respondents would be willing to pay up to 5 percent more for software of this sort.

GOING DIGITAL AND GREEN TOGETHER

Share of companies per sector that cited energy savings as the reason for digitalization projects in Germany (2017–2020)

36 %

ICT hardware

27 %

ICT service providers

30 %

media industry

Source: ZEW

Equinix has recognized Germany’s potential as an investment location and has been operating its own data centers here since 2014, exclusively with electricity from renewable sources. “Our customers are increasingly interested in their IT becoming more sustainable,” says Jens-Peter Feidner, managing director of Equinix Germany.

And software isn’t the only approach. Equinix operates its data centers using state-of-the-art hardware. The Frankfurt facility has a power usage effectiveness (PUE) rating of 1.2. PUE indicates the amount of electricity consumed in relation to the computing power provided (the closer to 1.0, the higher the efficiency). On average, German data centers reach 1.7 to 1.8.

Higher efficiency values come with a higher price tag. Equinix invested EUR 110 million in its Frankfurt site – but it turned out to be money well spent. The company has recently added another data center in the city and four more are in the works – representing a total investment of around EUR 1.1 billion. Equinix hopes to take advantage of the growing interest in Germany in sustainable IT expertise.