Template:Behem Aug-07

From Lauraibm

Full article: Could IBM Be the World's First Green Business Behemoth? (22-Aug-07)

IBM could be about to enter another phase in its history. The company's focus has remained steadfastly on the world of IT. But there are indications the company could be returning to its eclectic roots, and it is the burgeoning demands of the low carbon economy that appear to be driving this diversification.

• IBM's recent partnership with U.S. electricity provider CenterPoint and its investment in research into smart grid technologies capable of smoothing the path towards adoption renewable energy and dramatically cutting energy consumption by providing people with real-time visibility over their energy use.
• The company's newly revealed interest in in-car technologies, provides Exhibit B. The focus on the development of a car operating system capable of ultimately automating driving may not seem like a particularly green initiative, but when you consider one of the prime goals of such technologies would be to optimise fuel efficiency and ease traffic congestion it is clear a pattern is beginning to emerge.
• Of course, these initiatives along with the overarching Project Big Green commitment to limit IBM's carbon footprint and enhance the energy efficiency of its servers and other data center technologies still fit into IBM's core IT portfolio.
• But perhaps the most compelling clue that Big Blue could diversify comes in the form of reports that it is investing heavily in developing photovoltaic technology. According to a recent story over at the Cleantech Blog IBM is using its expertise in semi-conductors to make rapid progress in developing photovoltaic solar technology.

Demand for green products and services is set to soar, but at the moment the supply side of this market remains extremely immature. Consultancies such as SustainAbility and the myriad of cleantech start ups may have experience in the sector, but they all lack the scale large corporate customers will look for when procuring green products and services. Meanwhile, those large multinationals that have been most vocal about their green product lines are either entirely consumer-focused operations, such as supermarkets, or energy and car firms guilty of running their green divisions as niche concerns alongside their traditional polluting businesses.

In contrast, IBM, and several other large IT companies for that matter, are perhaps the best positioned to meet the demand for green services:

1. they provide the software and hardware that underpins all modern businesses;
2. they boast relatively low impact business models compared to heavy industries;
3. they have the engineering expertise in house that would allow them to diversify into other cleantech sectors;
4. and they often run large consultancy arms already well versed in managing business transformations.

IBM is as well positioned as any company to become the first green business multinational.