Interview: Ali Fenn, Chief Innovation Officer, ITRenew.

Dan Scarbrough interviews Ali Fenn Chief Innovation Officer at ITRenew

Ali Fenn:-

My name is Ali Fenn. I am Chief Innovation Officer at ITRenew, a global provider of circular data center services. We are working to connect very large hyperscale data center operators upstream with global markets downstream, as well as moving the industry towards a more circular economic model that maximises both financial returns and sustainability for all parties.

Dan Scarbrough:-

I have seen the research that you have done on the industry from a waste perspective. Can you take us through some of your key findings?

Ali Fenn:-

Sure. So as you know, the data center industry has spent a lot of time over the last 10 years focusing on operational efficiency and more recently has been driving towards the use of more renewable energy.  Our query is: IT hardware is the most significant portion of TCO. It is also the most significant portion of embodied energy and carbon compared to the data center infrastructure. We have been trying to quantify this and drive meaningful change on the back of this data. We undertook a full lifecycle analysis of everything that takes place from mining to component manufacturer to use phase to end of life sorting, shredding and smelting, with the objective of understanding where the best place is to look for meaningful change; and to understand if it is the operational phase where we need to be focused or are there other parts of the supply chain that could have a meaningful impact? As you would expect, grid mix affects the analysis significantly, but if you look at a data center, for example in Sweden, about three-quarters of the total co2 equivalent impacts of IT equipment happens before the equipment is ever turned on in a data center. So all manufacturing pre-use phase in a place like Quebec, where there is an even greater renewable grid mix, is more like 95%. This is clearly the next big place to look.

Dan Scarbrough:-

Interesting. Can you just give me a few statistics on the wastage that you saw from a server hardware perspective, and how extending the life of equipment can positively impact this?

Ali Fenn:-

Absolutely. If you know that embodied carbon is such a significant percentage of the total amount and we move from a linear model to a circular model, what you are doing is deferring new manufacturing – and ultimately deferring that significant component of embodied energy/carbon. As an industry, we are moving in the wrong direction. The global tech industry is currently at 4% of greenhouse gas (GHG) emissions globally and by some estimates, this is set to increase to 8%, which is going in completely the wrong direction. While the rest of the world is trying to contain GHG our industry is being driven by things like AI, streaming data and the edge explosion. This is taking us in the wrong direction and at the same time we are generating nearly 50 million tonnes of waste annually. To explain that visually, 50 million tonnes of waste is the equivalent of 18 Wheel Trucks stacked front to back from New York to Bangkok and back every year, annually. Annual is just annually. Yes! and in the data center space, we have about 50 million servers, with an average of 50 racks or more over the next three years. It is an inordinate amount of waste. Most of that stuff has been run for timeframes much shorter than they’re designed to run for, and they are going unnaturally early into the waste stream.

Dan Scarbrough:-

So what is the plan?

Ali Fenn:-

So the plan is to let the major hyperscale operators who need to refresh things on that kind of a cadence, because of the very unique demands of their infrastructure, to let them continue to do this and to facilitate optimization of reuse through making investments in hardware and software engineering – in order to enable the equipment to come out of those environments, pristine, perfect and a high-quality product. This equipment can then be recertified and given secondary and tertiary lifetimes. So you go from thinking about lifetimes in three-year cycles, or even four or five-year cycles to thinking about them in, for example, three-plus six-year cycles.  Through this, you are deferring significantly the new manufacturing and you enable both more value recovery financially for the upstream guys and very disruptive total cost of ownership and economics for the downstream guys who are more constrained by budgets, which the most of the world currently is.

Dan Scarbrough:-

How do the equipment manufacturers feel about this? Is it anti-intuitive for the hardware guys? 

Ali Fenn:-

Of course, it depends on who you are. But if you think about for example the ODM market. These companies from a business model perspective are not set up to support the global enterprise markets. You cannot do this when you are a 2% margin business. They can only support hyperscale customers who have all of the resources and do not need large amounts of support. This creates a huge gap and lack of accessibility and usability for the broader markets. What you have, therefore, is markets on the downstream side that would like more ODM equipment, but the providers of that equipment cannot service that market. So we have a situation that is poised to be like the certified pre-owned second-hand car industry. Car dealerships used to range from new car dealers all the way down to back street car dealers providing automobiles to very different people and there was this big gap in the middle. When they introduced the ability to buy a Pre-Owned, with a full warranty, no compromise, high quality, great performance kind of a vehicle, this appealed to a completely different car buyer and expanded the overall pie. So the market did not shrink. The market got bigger and the people were still going to buy new cars. We believe we have the same opportunity in this sector to meet the needs of the global market that are constrained by giving them access to something that they have not been able to access before now.

Dan Scarbrough:-

I get the automobile analogy: It is quite normal for you to buy a new car. That could definitely work with IT Hardware.

Ali Fenn:-

Provided it comes with the right quality, the right warranty and all of those things with the right information about it. Exactly. That is exactly the analogy.

Dan Scarbrough:-

In the presentation earlier we were talking about the BIOS and rewriting the BIOS, so the ownership of the asset is easily transferable and the date that they had for rewriting that was March 2021.

Ali Fenn:-

That is the requirement. The BIOS, which he is referring to is something called Linux boot. And that is actually already available. There is still work being done on it to make it fully ready for scale and deployment, but the 2021 date is actually the date at which the open compute project is going to require that any OCP certified systems have to come with open-source firmware. This will force the industry and if you want to be OCP certified, you are going to have to support open-source firmware, which will make an immense difference to the momentum to get it over the finish line.

Dan Scarbrough:-

But you could do it now. You do not have to wait for this date?

Ali Fenn:-

You do not have to wait for that date. But that date will be a gateway to large, enterprise kinds of adoption.

Dan Scarbrough:-

So if I am an operator, looking at my social impact as a business and I am prepared to engage in the second user IT Hardware market. How do I go about it?

Ali Fenn:-

Contact ITRenew anywhere in the world. We are working with Cloud Service providers and hosting companies. We are working with private enterprise. We are working with telcos and operators in the developing markets. Truly, because of our global operations and logistics footprint and the fact that we are situated next to every data centre environment in the world, we have the ability to decommission that equipment and take it back into the market almost anywhere very readily.

Dan Scarbrough:-

And the economics of it makes sense as well?

Ali Fenn:-

Yes. Generally speaking, people should be thinking about 50% TCO (total cost of ownership) advantage as compared to having to go out and buy proprietary OEM New Hardware.

Dan Scarbrough:-

It is clear what you are doing could have a significant impact, but how do you go about changing peoples’ mindsets? There’s a fear factor of changing what people are doing, of reliability, and  ‘can I get the same support on this piece of hardware’. We are after all talking about business-critical applications. So how do we deal with that side of things?

Ali Fenn:-

This is exactly what underlies a real kind of ecosystem. Through evangelising, enablement and engagement we are developing a shared ethos and a mindset change. We are doing this by working closely with our hyperscale partners, to have them help us engage with downstream customers and help communicate the validity of what we are doing. However, it also comes with real engineering, real data about benchmarks, real data about quality and failures and getting out there with evidence about the quality of the equipment that there has been no compromise on the performance. We are entering the market through the right channels that can support this change at scale. It is not about us acting in a vacuum. It is about pulling together all the relevant constituent parts that give the global markets the comfort that they expect and that they have always expected. It does, however, require a shift in mindset and fortunately, we are seeing, especially in certain parts of the world, both a real cultural and a regulatory push in the right direction. So we are making progress but you are right that it requires a shift in mindset. We believe the best way to do this is by getting lots of people to come together with the same goal and by doing the engineering that is defensible from a quality perspective and making people understand that they are not giving anything up and it is not taking a risk, it is not second best.

Dan Scarbrough:-

When we spoke before, one of the comments that stuck with me was the fact you mentioned regarding deep sea mining. Can you explain this fact to our audience?

Ali Fenn:-

Yes. The estimates are that sometime in the next roughly 40 years we will actually run out of the minerals and metals that are required to make electronic components through both the sources and countries that we use today. There are companies out there that are actively pursuing deep seabed mining as the right answer to this lack of resources. I believe this is the wrong idea and that we ought to start now, well in advance of that 40-year timeline, to find much more sustainable ways of maximising the lifetime value of our components and our infrastructure and recapturing those assets and making the system more regenerative and more circular, so that we do not have to start raping and pillaging the deep seafloor to secure these resources.

Dan Scarbrough:-

I am sure that recycling and re-engineering products is going to develop and change technologically over the next 10 years and we should be able to repurpose things this much better in the future than we can now and really create a circular economy.

Ali Fenn:-

Absolutely. And that is the goal. Extension of life is the first thing and that moves into a circular economy. Admittedly, when you are buying a second life and a third life the first phase is kicking the can down the road, and we are absolutely doing that, and it is not the end game but it is an essential piece to buy us time for all of the rest of these things to come online where we can truly move to really regenerative and closed-loop kinds of models, and we need technology to do that. But if we can buy ourselves an extra six, eight, ten or twelve years then that will be helpful.

Dan Scarbrough:-

Do you see technology developing that will enable better material recycling in the future?

Ali Fenn:-

Absolutely. I mean, if you look in a very isolated way at things like the lithium-ion battery space and the investment in lithium-ion battery processing, recycling technology is many billions of dollars just in the US alone and has gone from relatively nothing to this level overnight, So I expect that even in the next 24 months, that landscape will look very, very different. I think we will see the same thing across components. Broadly, we are seeing a lot of investment in the recovery of rare earth elements from hard drive magnets. Magnets are in every single computing device in the world.

Check out ITRenew @ www.itrenew.com

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