I have been writing and consulting about the Internet of Things since 1999, when I helped Jonathan Eunice create the “Pervasive Automation” practice at Illuminata, a boutique research firm based in Nashua, NH. Billions of dollars have poured into the space since then, but we still haven’t seen the big transformation many of us have expected for a long time. But increasingly it does look like machine to machine communications is going to get real.

IBM, for example, is investing heavily in Smarter Buildings, bringing the world of HVAC and asset management together with IT. Energy is the common thread there. I also wrote recently that IBM had open sourced some core MQTT technology, in an attempt to kick start the Internet of things, in a world made of messages.

At the other end of the infrastructure scale is a London startup called Pachube recently acquired by Logmein (remote access management for things rather than desktops… interesting potential) Its a simple broker and aggregator – initially targeted at environmental monitoring, though it can be used for pretty much anything. Pachube is very webby.

So what’s going to be in the middle, rather than the edge, where the business domain experience and knowledge is located? One interesting company in the space is my client ThingWorx. Why interesting? For one thing the founding team has done it before. This is industrial automation 2.0 for co-founder Rick Bulotta and the team. They sold Lighthammer to SAP back in 2005. ThinkWorx knows enterprise down cold-0 one of the reasons SAP bought them was massive industrial clients like Dow Corning.

The first time I got a demo of ThingWorx I was quite surprised. I expected something that looks like a message bus, but the platform is actually more like a app dev tools that understands a range of different endpoint types. A 4GL for building industrial automation apps if you like, or in modern parlance a mashup platform for business users.

The search and indexing in ThingWorx is also impressive. While not positioned in that way, it could potentially be seen as a Splunk for industrial sensors and devices.

ThingWorx is also beginnging to tie in some interesting partners- such as Sensei for smart grid management. Smart grid has been massively hyped, and covered extensively by our sister research arm Greenmonk, but the key point here is budgets. Smart Grid is still picking up stimulus funds, and as such its a great market to target.

I can’t promise 2012 will be the year of the Internet of Things. Like I say, its been 13 years since I thought it would take off. But – ThingWorx is well positioned to win clients in industrial automation, where messages are connected to business applications, and manufacturing and the supply chain become effectively integrated, and amenable to pivots around, for example, energy footprint.

Tom Raftery recently wrote a piece calling for public cloud providers to be more open about the energy footprints of their services to allow for customer and consumer benchmarking. You might expect the likes of Amazon and Google would be open to publishing a footprint, but sadly that’s not the case yet. The Silicon Valley leviathans are doing some great work in terms of efficient IT – see Facebook’s OpenCompute initiative for example.

But its interesting that a company with a rather different heritage is banging the drum for sustainability metrics in the cloud. Step forward traditional outsourcing and systems integration firm CSC, and vp of cloud computing Siki Giunta.

“We really need to really understand a workload, how long it runs. We need to understand the rhythm of the business, and provision to that… At the moment metrics collection is all over the place.”

Giunta said that regulatory environments such as the UK Carbon Reduction Commitment would start to force enterprises to be more rigorous about energy monitoring and management. But what should you measure, in order to get a better handle on energy use?

Obviously we eventually need to instrument everything, for an internet of things that drives more sustainable outcomes, but Siki argues that a simpler metric would be a good place to start.

“In terms of servers a common area of metrics is RAM. It doesn’t matter how many VMs you what matters is RAM. But customers don’t know the RAM capacity…. of their workloads. they just provision to the spike.”

“Going forward we’ll see on spot memory… spot markets. At a couple of banks, like energy markets today- there is a spot rate. In IT RAM is the metric – like kilowatts.”

Its very early days, but its good to see Giunta leading the debate, talking to her customers, and folks like the CSC Advisory Council, about measuring server use, and moving towards more sustainable clouds.

Given that CSC bills for cloud on the basis of RAM you can see the attraction of a RAM-based energy measurement metric.

I also like the idea of a brute force metric so organisations can’t use complexity as an excuse not to report on energy use.

So I am back from my holiday in Cornwall – and very nice it was too. But now the Back To School season is kicking in. That means travel, travel and more travel in the runup to Christmas, interspersed with a metric crapload of client consulting. When it comes to item 1 on my agenda though its A London Thing.

I am not sure where the idea came from but Prince Charles and his Charity Foundation have decided to open the gates of his London residence- Clarence House – for Start UK, a sustainability summit and garden party which will last nine days… Yes- *nine days*. IBM meanwhile is running a parallel sustainability event for businesses, each day with its own theme.

The themes are:

Day 1 – Smarter Cities for a Sustainable Future
Day 2 – Smarter Energy for a Sustainable Future
Day 3 – Smarter Transport for a Sustainable Future
Day 4 – People and Skills for a Sustainable Future
Day 5 – Start Young for a Sustainable Future
Day 6 – Smarter Supply Chains for a Sustainable Future
Day 7 – Finance and Sustainability
Day 8 – Smarter Analytics for a Sustainable Future
Day 9 – Smarter Business for a Sustainable Future

I am sure some of you are skeptical of Prince Charles role here, or IBM’s for that matter- but both HRH and IBM have a long history of championing Sustainability. I am pretty excited about the event. Greenmonk will be covering some sessions and we will of course be twittering incessantly. We’re helping with social media strategy too. With that in mind- if you’d like to be on the inside of the Business tracks, or working the crowds in the garden, please let me know. We may be able to bring you into the fold. I am not sure I can bring the web to Start, but I can perhaps bring you in!

I got the chance to meet with Symantec’s Jose Iglesias yesterday. We had a good chat about his company and its green credentials and strategies. Iglesias is a wonderful advocate for sustainability but Symantec a firm has some way to go in that regard. He therefore sees himself as an internal, as much as an external, evangelist at this point.

Before I proceed its probably a good idea to point out that Symantec is about far more than antivirus. The firm acquired Veritas back in 2004, which brought it a bunch of enterprise file and storage management capabilities. Subsequent enterprise acquisitions filled out the portfolio. Symantec’s Green IT story is very much an enterprise play and arguably a solid sustainability product strategy could help to increase visibility for some of Symantec’s enterprise tools.

Thus for example – Symantec NetBackup PureDisk for storage deduplication could be used to cut the amount of storage and power.

One challenge for Symantec is identifying and serving the new buyers in energy reduction. Most of the firm’s traditional practitioner purchasers are not tasked with reducing the energy footprint of the products they manage….

“We sell to admins, but few get compensated on energy savings”

To which I would say… not yet.

Smart Grid as Game Changer

One major opportunity for Symantec to change the account management game there is to parlay its IT experience directly into related spaces such as Smart Grid security and asset management. I knew before the briefing that Symantec is having some early success in the Smart Grid market selling, for example, cryptography. Security is a major issue overhanging smart grid and remains a key selling point. Iglesias and I discussed Smart Grid Standards in depth – I will write that up in the near future.

I am not a fan of FUD though it certainly works. But let’s get real. In Europe for example we’re getting all excited about the need for smart grid standards to prevent tampering with our energy supply. Yet Russia could turn off a gas tap and we’d be screwed within weeks, no smart grid required.

Whichever way you look at it – energy reduction is going to be very big business indeed. The tail is starting to wag the dog.

Sustainability Reporting

GreenMonk has been tracking tech company CSR reporting efforts. Indeed- I am chair of SAP’s external stakeholder panel for its 2009 Sustainability Report. My colleague Tom Raftery recently noted an interesting split between the efforts of hardware and software firms when it comes to sustainability reporting –hardware companies good, software companies bad.

Sadly Symantec isn’t the exception that proves the rule (we leave that accolade to SAP). For one thing it only reports on Sustainability once every two years – pretty much an instant fail according to my Reporting taxonomy – Six Ways to Make CSR Reporting and Strategy not Suck.

Why should IT suppliers improve their efforts in CSR? The most obvious business is Requests For Proposals. Many massive tech purchasers, such as BT, won’t purchase goods or services from firms that don’t have a strong plan to reduce emissions. Then there are reputational issues. The best graduates aren’t falling over themselves to work for BP. When it comes to staff retention the latest research from Center for Creative Leadership indicates that “the more committed a company is to its corporate social responsibility initiatives, the more engaged and committed their employees are likely to be.”

We’d certainly like to see some leadership from Symantec on Sustainability Reporting.

It’s the Storage, Stupid

Iglesias showed what a propellerhead he is when he launched into the green opportunities around enterprise storage.

“I started my career as a mainframe programmer. Resources were very constrained.  IT is relearning many of its roots, and we need to learn from past mistakes- that’s where the Symantec Green IT program came from.”

Let’s take RAID for example, the data protection mechanism.

“Minimise the hardware you need. With dynamic storage you don’t need RAID 5. Analyse your workloads. Humans are awful at managing data placement in storage. Software is much better adapted to that. Our products- namely Storage Foundations will identify all files- jpegs say, and drop it down to tier 3.”

Another quick storage management win is policies based on age – if you haven’t touched it in six months you probably don’t need it nearline. Iglesias said companies should use use less expensive storage, in order to attain big savings in cost and energy.

According to Iglesias The same capacity in storage takes 8 times as much energy for tier one as tier two.  The delta between tier one and tier three is 1/64.

Final Thoughts

Symantec has a new CEO, Enrique T. Salem – and it will be interesting to see if he shows more or less of a commitment to sustainability than his predecessor- John W Thompson. My bet is on the latter former. The economic opportunity for sustainability leaders is very real indeed. Smart Grid is going to be perhaps the biggest tech market ever- IBM and Cisco look like leaders, but who else is going to make the investments needed to compete with them?

disclosure: IBM and Cisco are clients

“The best way to predict the future is to invent it” – Alan Kay

Back in 2007 or so I had an epiphany about corporate social responsibility and sustainability. Until then I had been skeptical about CSR – which I felt was the proverbial lipstick on the pig. The guy that did most to persuade me of the value of CSR was SAP’s James Farrar. He introduced me to Transparency International, after which I argued:

Like many others I have tended to view corporate social responsibility (CSR) with a great deal of suspicion. Its just puff, PR and flummery. Corporates try and make us think they have responsibilities and interests beyond profits and share price. Greenwashing, and so on. But spending time with the likes of the BT CSR team, I am realising we have a real opportunity here. The web changes everything, and spiking energy prices and global warming mean that CSR is being reassessed. Talking about efficiency is no longer the game. Now the CFO expects the organisation to actually deliver it. Sustainability is not just a buzzword any more, which means CSR is not window dressing any more either.

CSR is becoming a window itself- an important gateway between the business and us: individuals, customers and stakeholders. CSR becomes another breach in the corporate social membrane. But as Hugh MacLeod says “Nothing pokes holes in a membrane better than a blog.” (for blog we could also read Twitter or Facebook).

IF CSR is already a window, or hole in the membrane, social software can accelerate the dialogue and flow of information.

The realisation that sustainability was beginning to really mean something helped to create a raison d’etre for Greenmonk: open data leads to better outcomes, which meant the redmonk model might make sense in some new contexts.

My vision for more effective CSR:

• Reporting needs to be an ongoing process and conversation, not a once a year event.
• Reporting needs to be more like an app and less like a document.
• Data needs to be freely shared, rather than presented in static form such as in a PDF – organisations should offer sustainability reporting APIs.
• Social. Web technologies allow us to put the social into CSR by engaging with a broader range of stakeholders.
• Sustainability must be tied into general business reporting and strategy.
• Sustainability must be a strategic imperative, not a PR-led effort.
• CSR reporting must be more like an app, and less like a document.

I have to say SAP performed surprisingly well in terms of realising this vision in its last reporting round. Active data, Facebook and Twitter integration and so on. My colleague Tom Raftery was moved to write: SAP’s latest Sustainability Report is teh awesome! SAP customers would do well to view SAP’s work as a showcase for its new products in the space, and consider using the firm’s frameworks in delivering their own 21st century Sustainability Reporting, Engagement and Strategy.

Things had moved into high gear in terms of delivering on that kind of vision when SAP invited me to be Chairman of the outside Stakeholder Advisory Panel last year, having helped with strategy the year before. The process was extremely interesting, and I will be writing it up in the next month or so. Anyway, here is the letter we wrote on SAP’s Sustainability Report for 2009, which I take the liberty of including in full. My advice to you- go check out the report, then see the letter.

Challenging SAP on form and substance

The Stakeholder Panel was invited to bring external perspectives to SAP’s executive management, to inform both the company’s Sustainability Report and its sustainability strategy. We see these roles as highly complementary: reporting is a means to the end of defining and executing a business strategy that is articulated around clear sustainability goals.  We have approached our review with the objective of 1) to enrich SAP’s sustainability strategy through a greater understanding of stakeholder expectations [SAP’s Materiality Matrix] inviting readers to vote and comment on sustainability priorities], and 2) to increase and improve SAP’s transparency, as a means towards greater accountability.  We are therefore pleased that the company has welcomed our input on both the form of its reporting and the substance of its actions.

Overall, the Panel is impressed with the scale and scope of SAP’s ambition for its sustainability reporting. One of the most compelling aspects of SAP’s sustainability strategy is its commitment to merge its values, which reflect a clear ambition to be a sustainability leader, with its corporate goals and core business strategy.  The Sustainability Report therefore serves the role of mission statement, stakeholder engagement tool and roadmap for what SAP has achieved to date and seeks to achieve in future”.

The Panel greatly appreciates SAP’s effort to make the Report more interactive, by opening up new engagement and feedback channels using social Web technologies, such as Twitter and Facebook. This strengthens the connection with stakeholders and opens the way for them to influence the company’s behavior.  This is an aspect of the report which will not only benefit readers, but also promote wider acceptance of this model by other companies considering similar steps.

Promoting Software for Corporate Sustainability

Of particular note is the fact that SAP has now unambiguously embraced the role of enabler. As a software company, SAP has a relatively modest direct environmental and social footprint, although we note the rising energy demands associated with the rise of cloud computing on which SAP will increasingly rely. We welcome SAP’s commitment to developing business solutions that can enable significant improvements in its customers’ sustainability performance, which it is pursuing through its enabler strategy [SAP’s Solution Map] outlining the company’s vision for software technology to enable a more sustainable enterprise]. SAP’s co-CEOs, Bill McDermott and Jim Hagemann Snabe, have emphasised the enabler strategy to key customer audiences, to reinforce the importance the company places on this aspect of its business.

Yet while this focus on the enabler strategy is welcome, SAP can further strengthen how it reports on it. The 2009 Report is thorough and transparent about SAP’s own direct environmental footprint – notably in travel and transport. But we believe that the next frontier is for SAP to measure and report on how it has enabled its customers first to reduce their negative impacts, and ultimately to increase their positive impacts, on society and the environment.  This will present a much more meaningful and complete picture of what SAP’s broader impacts are, and will also demonstrate the value that it adds to its clients, thereby strengthening the case for building its business around delivering sustainability solutions.  The 2009 Report is a good start: it includes links to case studies of SAP customers who have improved their sustainability profile.  But SAP should leverage its interactive data-driven approach to measure, report and indeed take credit for, the sustainability impacts of its customer base.

Language matters in innovation, providing a framework for thinking about how to solve problems. While the report often speaks in terms of optimizing efficiencies, sustainability can, and should be, an aspiration towards a restorative economy that enables abundance.  SAP should turn its attention to enabling its customers – and readers of its report – to evolve from managing down their negative impacts, such as emissions, health & safety incidents or ethical breaches, towards making a net positive contribution to society and the environment.  At present, SAP is serving as an agent that enables clients to modify their existing business models through incremental steps. Ultimately, however, SAP can act as a catalyst for customers to transform themselves by re-inventing their business models around new opportunities to increase economic benefit within planetary boundaries.  Defining new metrics to capture these positive effects, rather than just measuring and managing social and environmental ills, is where the real challenge and opportunity lies for SAP and its customers.

Assessing a new kind of Report
This Panel’s activities have been structured to accommodate a traditional static report, even as SAP has sought to introduce a dynamic and interactive reporting model.  This is a very positive step forward for sustainability reporting, but it poses a challenge for the external review process, which cannot operate on a continuous basis in the way SAP intends for the report. The Panel does not have a monopoly on external comment on the report, as SAP has enabled readers’ comments on both its report and its strategy via the report site. We welcome SAP leadership here, as an exemplar for corporations seeking to more deeply engage with stakeholders on sustainability issues.

We also see areas where SAP can improve its reporting. While SAP has done excellent work in presenting data visually through charts and graphs, sometimes less is more. SAP should aim for accessibility and digestibility, rather than aiming to present all possible information.  In addition, much of the language in the Report reflects the technology culture of the company, or, alternatively, makes heavy use of the jargon of corporate sustainability practitioners.  This may make it meaningful to certain specialists, but much of the language is impenetrable to the ordinary reader, giving the impression of SAP talking to itself rather than engaging with outsiders.

Summing Up and Conclusions

Finally, while SAP has pushed the boundaries of inclusiveness through its use of new media, it should also take care to ensure that the report is fully accessible.  In many parts of the world where SAP and its clients do business, Web access is not generally available. Therefore the report may not be as available to those readers.

We applaud SAP for its innovation in reporting format, and for the clarity with which it has articulated its two-part sustainability strategy.  We look forward to continued innovation, and more detailed information in the future about how the strategy is being implemented, and how its enabler strategy is delivering not only business results, but also sustainability impact.

I have a lot more work to do in terms of documenting the process, and explaining how I see CSR evolving. But that’s the nature of the beast.

disclosure: SAP is a client though I was not directly paid for being on the Sustainability Panel.

I wrote a post on Greenmonk this morning adding context to a story about Greenpeace chiding HP for “backsliding” on a commitment to remove PVC and BFR from its electronic equipment this year. The issue being, HP said it never made the such a strong commitment in the first place.

Something has been bothering me all day about this: the danger is that if we slam companies too hard for making sustainability commitments they don’t manage to keep then they might avoid putting forward audacious goals at all. The danger is that environmental reporting goes the way of financial reporting – which is all about managing analyst expectations rather than truly reflecting the state of the business. Be conservative about the numbers so you can beat them- that’s the GE Way. But massaging figures to look good has a rather more unpleasant corollary- fraud.

We’re already effectively defrauding the planet by not accounting for environmental damage and degradation on our balance sheets. If environmentalism is reduced to a PR-driven quarter over quarter “continuous improvement” then we’re really screwed. Of course we should hold public statements by companies and governments up to scrutiny, but we should rate organisations on what they do than rather than on what they say.

Greenpeace may see things differently – thus Apple was applauded this quarter for a new advert about “the green credentials of its Macbook“, whereas others might just call greenwash! (especially given Greenpeace is historically quite critical of Apple).

I want to see the likes of HP make big bold predictions about sustainability. Without big goals after all we won’t make progress. Its important we don’t stymie debates by making corporations too scared to fail. Sustainability is going to have some switchbacks. Progress is never linear. Corporations need to be able to discuss sustainability goals in public without being completely slammed for not meeting them. Once again- lets not make the mistakes of financial reporting.