By Curt Finch, CEO of Journyx, Inc.
What constitutes 90% of the value in recent asset sales on Wall Street by large companies? The answer is data centers and headquarters. When Lehman Brothers went bankrupt and sold its assets to Barclays for $1.75 billion, its data centers and headquarters constituted 86% of the value. This echoes the JPMorgan-Bear Stearns fire sale, in which Bear Stearns' two data centers and headquarters also represented most of the price. Why is this so?
A palatial headquarters generates no revenue for any business, and its upkeep depresses profits, sometimes significantly. Yet another reason to sell your headquarters and data centers is to switch to Software-as-a-Service (SaaS) solutions. Not only is this an excellent financial decision, but SaaS solutions are much greener than hosting your data on a local server.
• Less Fossil Fuels
SaaS solutions enable telecommuting. This means that you no longer have employees wasting fuel by driving to work and getting stuck in traffic. With SaaS solutions, you can work in your home, a coffee shop, or your local bookstore. All you need is a wireless laptop and a cell phone. More choice in your work environment also leads to smoother relations with colleagues and less stress in your life.
• Less Energy
SaaS allows the sharing of resources, like carpooling. Instead of one server in your company serving one population of users sporadically, an equivalent server can sit in the data center of a SaaS provider and serve multiple companies worldwide, taking advantage of the inevitable low activity during the night in the U.S. to provide service to European or Asian customers. Computers use energy whether they're active or idle, so the computer in your company's server closet is wasting energy at night. SaaS servers are not as wasteful of energy in this regard.
According to Wikipedia, world energy consumption increased from about 5 terawatts in 1965 to around 15 today, 80% of which comes from fossil fuels with the balance coming mostly from nuclear and hydro. This consumption is expected to increase continuously over the next few decades. The amount of energy you save by switching to SaaS instead of letting your local computers remain idle can make a big difference.
• Less Landfill Waste
Consolidating servers is not just about saving energy. Consider the fact that every computer that is bought eventually ends up as waste, and this waste is pretty toxic. In fact, National Geographic recently laid out some of the ways in which excess technology harms the environment:
- Plastic Casings – contain brominated fire retardants that can cause thyroid damage and harm a fetus, and PVCs which produce highly toxic dioxin when incinerated. In addition, a computer’s plastic casing has plastic stabilizers which include cadmium, a heavy metal carcinogen which can damage kidneys and bones.
- Circuit Boards – contain mercury and lead, both of which can cause brain damage.
- Connectors – contain beryllium, a carcinogen that causes lung disease.
- Metal Plates and Housings – often contain hexavalent chromium (highlighted in the movie Erin Brockovich), which causes liver and kidney damage as well as a variety of other ailments.
- CRTs have a multitude of toxins as well, but they are increasingly being replaced with flat screens. Yet in our experience at Journyx, flatscreens have a shorter life, so though they may be less toxic, they can ultimately contribute more to landfills.
• Less Paper
SaaS solutions often provide a WSDL or SOAP application program interface, making integrations to accounting and other automated systems a snap. These integrations avoid environmentally damaging paper document creation and processes that are based on human resources and therefore error-prone. SaaS requires the ability to integrate, so the use of SaaS encourages you to not kill trees.
In fact, paper-based and unintegrated processes that could be automated waste more than just your time. If you waste 2 hours out of your 8 hour day doing work that the market will not reward your company for, then you wasted 25% of your day. This means that you have also wasted 25% of the gas that brought you to work and 25% of the electricity burned by your computer that day. Automating paper-based processes is therefore more than good business; if you care about preventing the waste of lives and resources, it is a moral duty.
Wall Street is ditching its servers, and perhaps you should too. By converting your automated systems to SaaS alternatives like SugarCRM, Journyx, QuickBooks Online and others, you can save time, money and the planet.
For more information on how to choose a SaaS provider, see my article on this topic at the DM Review.