Bravo New York Times For Discovering Reality in ‘Power, Pollution and The Internet’

This past Sunday, investigative journalists at The New York Times created something of a furor in the dweeb-o-sphere with a lengthy article titled Power, Pollution and the Internet: The Cloud Factories.

• "A yearlong examination by The New York Times has revealed that [the] foundation of the information industry is sharply at odds with its image of sleek efficiency and environmental friendliness."

The Times’ journalists uncovered the ’shocking’ fact that the Internet, from Facebook and Instagram, to iCloud and Amazon, is only possible because behind the sleek Galaxies, iPhones and iPads lurks a truly massive physical infrastructure. Warehouse-scale buildings that dwarf a typical Wal-Mart store, chock full of hot microprocessors. And they all consume enormous quantities of energy too. Go figure.

The story drew immediate criticism from the cognoscenti pointing to technical flaws. And there are some whoppers in the story, such as "...data centers can waste 90 percent or more of the electricity they pull off the grid, The Times found." Geez guys. You think that people who design, build and operate data centers must have IQs below the temperature of a computer room. No industry operates at anything like that kind of appalling inefficiency, especially one that knowingly consumes more energy than global aviation.

To see some of the substantial nits, check out fellow Forbes columnist Dan Woods, or Slashdot, or for a deep dive into techno land, an especially thorough review is at diego’s weblog. But nitpicking aside, give The Times credit for one thing: they at least noticed that the Internet is now a major industry. It is as well our fastest growing industry.

The central fact that The Times failed to note: The share of our economy devoted to moving bits — ideas and information — is already bigger than the share associated with moving people and stuff.

If we add up everything involved in transporting stuff and people – from making and using cars and airplanes, from F150s to Norfolk Southern and FedEx – it accounts for roughly a half trillion dollars of America’s GDP.

By comparison, accounting for everything associated with information – from digital movies and server farms, from iPhones and Intel, to health records and data mining – we find two trillion dollars of our GDP. All that, it should be obvious, requires a vast infrastructure.

Call me cynical, but predictably The Times reporter(s) framed the Internet’s infrastructure issue as an environmental problem. It’s not. But it is most definitely a business and technology problem. A recent global survey from Datacenter Dynamics found: "Energy cost and availability is the #1 worry of data center operators." (For more on data center cost realities see Price Matters.)

To be fair, it is now a PR problem for the industry given how The Times has framed the issue, and how their friends over at Greenpeace have too. A recent Greenpeace study looking at Internet energy use, pejoratively branded companies that seek low-cost electricity as "dirty" and concluded: "If the Cloud were a country, it would have the fifth largest electricity demand in the world." Greenpeace is on target regarding demand, and way off-base on the implications.

Here’s a news flash for The New York Times: bits are electrons. And when you create, store, crunch and transport enough of them, a whole lot of electricity is consumed.

The growth rate in bits is so torrid that forecasters are beginning to run out of numerical prefixes large enough to count. Cisco says we’ve entered the zetabyte era. A zetabyte is a 1,000 billion gigabytes. Astronomically large numbers are hard for humans to fathom. A zeta-stack of dollars would reach to our sun and back – one million times.

So even though each single logic operation or bit stored or transported requires only a miniscule amount of electricity, the number of bits is overwhelming large. Analogously, we know molecules are tiny, but put enough of them together and you get the Freedom tower. Numbers matter.

Reading The Times on an iPad consumes more energy than reading it on newsprint. As the paper industry has taken pains to point out, making paper is remarkably energy efficient. But it’s just not as economically efficient as digital delivery, which explains everything about the death of paper.

Watch a video on your iPad for a half hour and somewhere in America about 10 pounds of coal and a gallon (in oil equivalent terms) of fracked natural gas is burned. (See my earlier column: Opportunity In The Internet’s Voracious Energy Appetite: The Cloud Begins with Coal (and fracking).)

This is the interesting part of the story that The New York Times failed to fully investigate. They didn’t follow the supply chain upstream. The Times got all wrapped up in the "pollution" from testing back-up diesel generators. Massive battery arrays and diesels are needed for reliability to keep data centers humming while waiting for the grid to re-start when it episodically but regularly stops.

Focusing on the back-up generators is the equivalent of discovering that cars have batteries to restart the engine, but completely forgetting to look at the other end of the vehicle and count gallons in the fuel tank, and the barrels of oil further upstream.

Data centers and the Internet inhale electrons from the grid, not from diesel generators, and the grid is powered almost entirely with coal, natural gas and uranium. As The Times noted in a follow-up story, Data Barns in a Farm Town, Gobbling Power and Flexing Muscle, to get cheap power, Microsoft, Yahoo and others rushed early on to stake out locations for data centers at the handful of ultra-low-cost hydroelectric sites around the country. (There’s not much of that low hanging fruit since hydro is barely 10 percent of our electric supply.)

If you have a data center – any business — that needs 50 MW of grid capacity, you care about the price of the electrons. Locating an enterprise class data center in say North Carolina or Wyoming instead of California or New York saves $160 million in electricity costs over the four-year life of the servers powered. All those savings from cheap power flows to the bottom line as profits. If you were as lucky as Microsoft and Yahoo to stake out early sites with preferred rates near old hydro dams, you can double those savings. The Internet is a business. Those kinds of savings and profits matter.

Much of the criticism raised over The Times story was that the underlying technology issues are much more complex (what isn’t?) than the journalists represented, and that they used old examples and anecdotes, and old data. They failed to account for the fact that data centers are much more efficient now. True enough. But that’s irrelevant.

There is no single piece of infrastructure where power issues are better understood, more examined and more carefully controlled than in data centers. The reason is easy to understand. For data centers, the cost of power to operate servers now approaches the cost to buy the servers themselves. And the price of the latter is dropping while the former is rising.

It costs roughly $7 million per megawatt in hardware and physical stuff to build a warehouse-scale data center full of electron-consuming servers. And, it costs an additional roughly $6 million per megawatt to supply the electricity to the facility. (See "Like" a "Friend" & Burn Some Coal.)

And the most common solution proffered for this power "problem"? Efficiency. The truth is engineers always pursue greater efficiency. But with respect to computing in particular it bears noting that increasing computational energy efficiency is precisely what causes overall Internet energy use to rise.

At the computing energy efficiency of the early 1970s, one iPad would use as much electricity as all of the IBM mainframes that were sold in a single year at that time. If computing had not become stupendously more efficient, the Internet couldn’t exist and there wouldn’t be a single data center in the world.

Efficiency has interesting consequences. A 1995 microprocessor running 24×7 would consume about 40 pounds of coal a year (assuming 50% of the electricity comes from coal, about the national and global average). Fast forward to a 2012 CPU that runs 30 times faster, and we find that it requires 10 times as much power. With 30 times more speed but only 10 times more power, that’s a whole lot more efficient. But run the 2012 processor 24×7 and you burn 400 pounds of coal a year. Thousands of data centers are each populated with hundreds of thousands of processors. More are coming.

So here’s three things the New York Times didn’t look into that have profound implications for the Internet and Cloud’s future energy demand.

1. We’re in sight of an efficiency wall for computing. No, it’s not totally over. Efficiency will still get much better, but just not at the historical exponential rate of improvement. Meanwhile, demand for bits continues to rise at the historic exponential rates. This combination arithmetically promises a faster, not slower, growth in future overall Internet energy use. (See The Efficiency Wall and the Future of the Internet’s Energy Cost.)
2. And while The Times has been focused on data centers, high-bandwidth wireless connections are also facing an efficiency wall. A global Alcatel project concluded: "Mobile telecommunication networks are increasingly contributing to global energy consumption." (See Welcome to Earth Where Networks Gobble Power – and Coal.)
3. The Cloud will increasingly absorb data-centric services bringing super-computing capability to everything. The Cloud dramatically increases economic efficiency and it will increase energy consumption. (See Will the Cloud’s Efficiency Cut Energy (and Coal) Use?)

We haven’t even begun to tap into the expanding power of broadband computing. The world, with the U.S. in the lead, is on the precipice of another great tech and economic growth cycle. Many seem reluctant to acknowledge this is about to happen perhaps because it’s hard to feel optimistic in the midst of the Great Recession, or perhaps for fear of being labeled a Pollyanna for predicting the next bubble. It’s not a bubble. (See The Next Great Growth Cycle.)

The Times is right about one thing, which I’ve witnessed first hand. A lot of folks in the IT industry are uncomfortable if not downright irrational when it comes to talking publicly about the energy facts of life. Doubtless The Times will add to that discomfort. Sadly, a lot of folks in the IT industry hide behind greenwash language and projects, bending to fear of being labeled by Greenpeace as part of some dirty dozen for pursuing cheap power so their businesses can make a profit. China would be happy to take up the slack, as I noted earlier in The Great New American Outsourcing, Clouds to China?

Time to grow up, team. The cat’s out of the bag. Bits are electrons. We want a whole lot more of both. And price matters.

Oh, and for investors – this is a whopper of an infrastructure investment macro.

Riding this wave of electric equipment demand for the 21st century you find familiar names like GE [NYSE: GE], Siemens [NYSE: SI], ABB [NYSE: ABB], and Honeywell [NYSE: HON], and less familiar names but utterly dominant digital-power market leaders like Emerson [NYSE: EMR], Eaton [NYSE:ETN], and Schneider [FR: SU-FR]. Check their web sites and you’ll see lots of chest-thumping about powering the digital economy. And despite The Times beating up on indispensible diesel generators, this whole trend is bullish for venerable Caterpillar [NYSE:CAT].

If there’s confusion in the media and public about all this Cloud stuff, perhaps we shouldn’t be surprised given what a recent national survey commissioned by Citrix found when people were asked what they knew about the Cloud.

• "...most respondents believe the cloud is related to weather, while some referred to pillows, drugs and toilet paper."

Hmm. What can you say? (The folks at The Onion were ahead of The New York Times. See their video, HP Offers ’That Cloud Thing Everyone Is Talking About’.)

Some other results from the survey include:

• 51% believe stormy weather can interfere with cloud computing
• 22% admit that they’ve pretended to know what the cloud is or how it works
• 17% have pretended to know what the cloud was during a first date
• 56% think other people refer to cloud computing in conversation when they really don’t know what they are talking about

I’m not saying that the journalists at The Times share the same level of knowledge about the Cloud as revealed in the survey of the general populace, but it IS a whole new world.

This piece originally appeared in Forbes

This piece originally appeared in Forbes