Spotlighting Energy Efficiency

A couple of months ago, I had a conversation with a telecom marketing VP who told me that an incumbent European service provider had put his company's equipment through an extensive energy efficiency/environmental audit as part of the purchasing process. The carrier appeared worried about finding bad apples in its network equipment supply chain that could negatively impact its environmental goals and tarnish its public image.

This story spurred me to think about how vulnerable a large incumbent equipment supplier might be if the products that it had been deploying were deemed energy inefficient. I thought specifically of Cisco Systems Inc. (Nasdaq: CSCO) because -- despite its pioneering role in promoting telepresence -- the networking giant has been taking some hits lately from competitors when it comes to the amount of energy required to operate and cool its products. Alcatel-Lucent (NYSE: ALU), ECI Telecom Ltd. , Foundry Networks Inc. (Nasdaq: FDRY), and Juniper Networks Inc. (NYSE: JNPR) have been emphasizing significant power efficiency advantages vs. Cisco on their newest switches and routers. Juniper, for example, has highlighted that its T-series core router uses up to 40 percent less energy than Cisco's competing platform.

On top of this, in early September, Nortel Networks Ltd. began stepping up its energy-efficiency marketing campaign aimed directly at Cisco. The highlight is Nortel's Energy Efficiency Calculator, which businesses can play around with to figure out the energy and carbon dioxide emissions they might be able to save by selecting Nortel over Cisco. Using industry analyst figures on installed data/voice networks, Nortel estimates that in the past five years enterprises have paid $6.1 billion more in energy costs for Cisco-based networks than they would have for comparable Nortel-based networks.

Energy consumption has clearly emerged as a major topic for telecom and data center network operations, and we are going to hear a lot more debate on this issue before the dust settles.

On October 27 in Dallas, Light Reading and Heavy Reading will be joining with AT&T Inc. (NYSE: T), Bechtel Telecommunications , BT Group plc (NYSE: BT; London: BTA), Clearwire LLC (Nasdaq: CLWR), and multiple equipment vendors at our Green Telecom: 2008 event to highlight strategies and options for reducing energy consumption and implementing environmentally friendly telecom initiatives. Consider joining us for some lively discussions at the show. Activists are welcome, if they promise to behave themselves.

— Stan Hubbard, Senior Analyst, Heavy Reading

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