Picture Sarah, an IT Manager at a forward-thinking manufacturing company, grappling with rising energy costs and a new corporate mandate to reduce their carbon footprint by 20% in the next three years.
She knows their production line is energy-intensive, but a recent internal audit revealed a surprising culprit: their sprawling portfolio of software licenses. Hundreds of applications, many sitting idle, consuming power on employee devices and occupying valuable server space.
This scenario is not unique; many organizations find that their software assets, often overlooked in sustainability initiatives, contribute significantly to their environmental impact.
Understanding Your Digital Carbon Footprint
The digital carbon footprint represents the total amount of greenhouse gases, primarily carbon dioxide (CO2), released into the atmosphere due to an organization’s activities related to digital technology. This includes using digital devices, internet services, data centers, and the entire software and hardware lifecycle.
The digital carbon footprint encompasses an organization’s digital activities’ direct and indirect environmental impacts. Direct emissions stem from the energy consumed by devices such as computers and smartphones and the power required to run and cool data centers. Indirect emissions arise from the manufacturing, transportation, and disposal of digital assets, including hardware and software. These emissions are typically quantified in tons of carbon dioxide equivalent (CO2e).
Recognizing the substantial contribution of IT assets to an organization’s overall carbon footprint is crucial. According to the World Bank, over 40% of the information and communication technology (ICT) sector’s carbon emissions are directly tied to IT assets, encompassing the physical hardware and the software enabling their functionality.
These components include:
- End-user Devices: The energy consumed by computers, laptops, smartphones, tablets, and peripherals. For instance, a typical staff desktop and screen used for eight hours can result in greenhouse gas emissions equivalent to around 70 kilograms of CO2 per year due to electricity consumption.
- Internet Usage: The energy consumed by the network infrastructure necessary for transmitting data across the Internet.
- Data Centers: Vast amounts of power are required to run servers, storage systems, and networking equipment, as well as for cooling. In 2022, data centers globally consumed 460 terawatt-hours (TWh) of electricity, accounting for 2% of the world’s total electricity usage, and this figure is projected to increase substantially.
- Software: The energy used by the hardware required to run the software, the energy consumed during software development and updates, and the emissions from the manufacturing and eventual disposal of the hardware on which the software operates. Training a single neural network AI model can emit as much carbon as five cars over their entire lifespans.
A high digital carbon footprint can lead to increased operational costs, potential financial penalties for non-compliance with environmental regulations, and significant damage to the company’s reputation. Conversely, reducing digital carbon emissions can result in cost savings, an improved brand reputation, and new market opportunities.
Additional Read: Optimizing Federal Software Investment: How OpenLM Can Make a Difference
The Power of Intelligent Software Asset Management
Smart Software Asset Management (SAM) offers a powerful solution for gaining visibility into an organization’s software ecosystem, optimizing its use, and reducing its environmental impact. Smart SAM represents a strategic and data-driven approach to overseeing all software assets within an organization throughout their entire lifecycle.
Key benefits of Smart SAM include:
- Comprehensive Visibility: AI-powered technology to discover and inventory all software assets, providing a detailed understanding of the organization’s software footprint.
- Granular Usage Monitoring: Tracking how frequently and for how long each software application is used, identifying underutilized or unused software.
- Intelligent License Optimization: Analyzing usage data with license entitlements to identify opportunities for rightsizing licenses, reallocating underutilized licenses, and avoiding over-provisioning.
- Proactive Lifecycle Management: Managing software assets from acquisition to retirement, including planning for upgrades and replacements.
- Automation and AI-Powered Insights: Automating software discovery, tracking compliance, identifying anomalies, and providing recommendations for optimization and energy savings.
Modern software asset management provides deeper, data-driven insights into actual software usage patterns, allowing for consolidation of redundant applications and informed decisions about future procurement.
Additional Read: Managing Software in the Multisite and Hybrid IT Environments of 2025
How Next-generation SAM Directly Reduces Carbon Emissions
One of the most direct ways asset management reduces carbon emissions is by identifying and eliminating unused software. By uninstalling or deactivating unused applications, organizations can reduce the energy consumption of end-user devices. Unused applications running in the background contribute to substantial energy waste.
Intelligent asset management also facilitates optimizing software licenses. By analyzing usage data against purchased licenses, organizations can “rightsize” their software agreements, avoiding the energy and resource costs associated with over-provisioned licenses.
Smart SAM extends to efficient cloud resource management. By identifying underutilized or idle cloud instances, organizations can scale down or terminate these resources, minimizing energy usage in data centers. Cloud waste, primarily caused by underutilization, accounts for a significant portion of cloud spending.
Finally, efficient software management can contribute to extending hardware lifespan, leading to an indirect reduction in carbon emissions. By ensuring software compatibility and avoiding unnecessary resource-intensive software, organizations can reduce the strain on hardware infrastructure.
Additional Read: The Future of Engineering Software: Containerization and the Cloud
Data-Driven Evidence and Real-World Examples
A study by 1E found that companies waste an average of 37% of their software budget on unused software. In the US alone, this translates to an estimated $30 billion in wasted IT spending each year.
Several companies have demonstrated the power of using software and data to track and reduce their carbon footprint. Beiersdorf uses a data platform to track emissions in real-time and compare the carbon emissions of different options. Grupo Bimbo adopted Microsoft Cloud for Sustainability to automate the collection and analysis of emissions data.
Beyond Energy: Reducing E-waste with Data-driven Asset Management
Smart SAM can help mitigate e-waste by facilitating the extension of hardware lifespan, providing accurate inventory data for informed disposal decisions, and informing the selection of sustainable vendors.
Embracing Next-gen Asset Management for a Greener Future
Software asset management plays a significant role in helping organizations achieve their sustainability goals. By providing visibility, enabling optimization, and facilitating proactive lifecycle management, smart SAM is crucial for reducing an organization’s digital carbon footprint.
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