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International Business Machines Corp
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Microsoft (MSFT) is exploring the growing energy-efficiency market by using its headquarters as a testing ground for analytics software that helps cut the carbon emissions—and power bills—of office buildings.
The Redmond (Wash.)-based software giant has been collecting and analyzing millions of data points related to energy usage on its campus each day since the start of the year, according to a company report in October. Microsoft said this approach can save it an estimated $1 million annually.
“By integrating powerful analytics that add intelligence to existing building infrastructure, our buildings got smarter, more efficient, and less costly to operate,” said Rob Bernard, chief environmental strategist at Microsoft.
In addition to cutting its power consumption, Microsoft is working with vendors to improve proprietary technologies that could be used in the energy-efficiency market for commercial buildings, the company said in the report. That market is forecast to reach $103.5 billion by 2017, up more than 50 percent from this year’s $67.9 billion, according to Pike Research.
In the U.S., companies spend about $100 billion on energy for their offices each year. About 10 percent to 30 percent of that cost could be saved by better collecting and monitoring of building information, according to Accenture (ACN).
“All the big IT companies are getting into this,” says Eric Bloom, a Pike Research research analyst who covers energy efficiency in buildings. Other companies competing in this market include International Business Machines (IBM) and Hewlett-Packard (HPQ), as well as more conventional building-management vendors such as Siemens (SIE) and Johnson Controls (JCI).
Already, smart building systems can correlate information from multiple sources, including such internal building data as temperature and air flow, as well as external sources such as utility bills and weather updates. Analysis can point to low-cost fixes such as lowering blinds to conserve heat at certain times of the day or year. In the future, buildings could respond in real time to changing weather conditions.
Buildings account for nearly 40 percent of Microsoft’s carbon footprint. Along with data centers and employee travel, they are among the top three contributors to the company’s carbon emissions. The company has pledged to reduce its carbon emissions per unit of revenue by at least 30 percent in 2012, compared with 2007 levels.
“There’s no way you’re going to make much of a dent in your carbon footprint if you don’t do something dramatic in your buildings,” Bloom says.
Fixing that waste can be relatively inexpensive, compared with a major retrofit. Sysco (SYY), a food services company, found that inexpensive or even free fixes could make a big impact. Sysco ran a three-year energy-efficiency program that featured analytics and cut energy use by 28 percent. The first 18 percent in savings required low or no-cost fixes, according to a November 2009 study by the Lawrence Berkeley National Laboratory.
On a campus as large as Microsoft’s, it’s a complex endeavor to find fixes. Its headquarters encompasses 118 buildings, 30,000 pieces of mechanical equipment, and seven major building-management systems, according to the company’s report. In the trial, which involved 13 buildings and tests of three different vendors’ products, Microsoft discovered it could identify problems as they occurred. Instead of manually inspecting each piece of equipment, automated fault-detection software can tell technicians where problems are occurring.
That software also automatically calculates the cost benefits of fixing each problem. Engineers can prioritize projects, such as fixing a leaking water valve or replacing a temperature sensor, according to which alteration will provide the greatest savings. This type of fault detection alone might help Microsoft save more than $1 million per year, according to the report.