'Green' Perceptions Revealed by Global IT Buyers: Some Brands Shine More, Some Countries Care More and Most Buyers Need More Convincing

June 18, 2008

Do "green" products and marketing matter in the enterprise technology industry? According to GreenFactor, – the first global "green" enterprise IT study released today by Strategic Oxygen, GCI Group and Cohn & Wolfe, "green" products are not only highly important for the environment, they are potentially profitable: More than 70 percent of the global respondents said they "probably" or "definitely" would increase their preference for a brand's "green" products if they were convinced of the positive impact on the environment and business. Almost 60 percent said they would expect to pay a premium for "green" products.

While there are significant "green" IT opportunities, GreenFactor also highlights some major challenges, according to Michael Gale, CEO, Strategic Oxygen. "There are statistically significant differences between countries, so many of the 'green global campaigns' being implemented by IT brands today will not be successful. Plus, the C-suites and their IT groups are not in-synch and really don't believe there is a 'return on green'"

"The bottom line is that 'green' IT marketers are going to have to be really smart about how they go to market," added Paul Walker, president, GCI Group. "They need to target the right countries and the right 'green advocates' in the C-suite with credible value propositions. We're excited about GreenFactor because it provides a strategic roadmap for getting it right."

Conducted in the first quarter of 2008, GreenFactor surveyed more than 3,500 enterprise IT decision makers – including CXOs, CIOs, IT Managers and Line of Business Managers – in 11 countries. The study looked at 26 enterprise technology brands to determine decision makers' perceptions of "green" IT, products and marketing. Additional information and video commentary on the results can be found at www.greenfactorstudy.com

"Green" Insights and Implications
CMOs of enterprise IT brands should take note of four major findings in the study:

  • No single enterprise IT brand is perceived as a clear "green" leader globally. In fact, there is no statistical difference between the top seven leaders (leaders listed below).
  • The importance of "green" IT to IT buyers varies country by country. India's respondents, for instance, emerged highest as both expecting to pay at least a five percent premium on "green" IT and as having a preference for it if they can be convinced of positive impact on both the environment and their budgets. At the same time, nearly one quarter (24%) of respondents in Germany believe buying "green" products has no real impact on the environment, generally twice that of any other country. Findings like this imply that universal, global "green" messaging is ineffective.
  • There are disconnects within organizations themselves on the importance of "green." For instance, CXOs globally chose "price" as a barrier to "green" with lower frequency than all other titles surveyed, and CIOs state they "definitely will" look to purchase some "green" products this next year at a higher rate than other respondents. This suggests that IT brands should target C-level executives in order to convince them to direct and empower their teams to include "green" IT into specifications.
  • Not surprisingly, "perceived economics" is the biggest barrier to "green" adoption. In nine of 11 countries polled, price was the top barrier. Marketers must focus on better communicating total cost of ownership and overall value to potential buyers.

Green "Leaders" and "Laggards"
Despite varying degrees of "green" products, programs and marketing initiatives, there is no one clear "green" IT brand leader globally. However, when IT decision-makers and IT influencers were asked which brands they most associated with "green" technology, a handful of companies consistently came out on top:

  • Apple
  • HP
  • Microsoft
  • IBM
  • Intel
  • Sony
  • Dell

Those companies that did not fare as well on "green" perception were:

  • SAP
  • Alcatel-Lucent
  • Nortel
  • EMC

Globally, Microsoft and Google have a statistically significant* higher perception of being "green" than all other software and Internet companies included in the study.

"It's interesting that Google, a company that does not produce tangible hardware or software, but consumes a significant amount of resources appears so highly on this list," said Mr. Gale. "They've clearly done a good job of demonstrating they are working hard to innovate new, more power efficient solutions."

Green Countries
India emerges as the study's leader in "green" IT potential, as a higher percentage of respondents in that country expect to pay at least a five percent premium on "green" IT or "definitely would" increase their preference for "green" IT with proven ROI – or both.

The remaining countries fall progressively further behind India due to a tendency to lean strongly toward either an expectation to pay at least five percent more or stating they would definitely prefer "green" with proven ROI – but rarely both.

In fact, buyers in some of the largest economies and B-to-B markets for technology are not convinced they would prefer "green" even if its ROI could be proven, notably Japan and Canada. Conversely, IT buyers in Mexico are more likely to prefer "green" if the ROI is proven, but are unlikely to pay a premium.

When the data is cut to view respondents that satisfy both conditions -- expect to pay at least a five percent premium on "green" IT and "definitely would" increase their preference for it with proven ROI – India remains the leader in "green" IT potential by a wide margin:

  • India (22.3%)
  • U.S. (14.9%)
  • Mexico (13.9%)
  • UK (12.9%)
  • France (12.3%)
  • Australia (11.9%)
  • Brazil (8.4%)
  • Canada (8%)
  • Germany (7.9%)
  • Japan (6.4%)
  • Italy (4.8%)

"Initially, it seems counter-intuitive that India would be 'number one,'" said Mr. Walker, "but this is a country experiencing a high-rate of IT investment and datacenter growth – coupled with 'brown outs.' It makes sense that IT decision makers there would be more sensitive to environmental challenges and increasingly supportive of growing their "green" IT solutions."

Green Premiums
The GreenFactor survey also sought specific information on how much more or less respondents would expect to pay for "green" technology, including desktops, laptops, servers, storage or networking hardware. The results show that "green" IT premiums are expected more in some countries than others.

Nearly two-thirds of all respondents in Mexico (63%) and more than half of respondents in Italy (58%) and Brazil (57%) expect to pay the "same" or "less" for "green" IT. On the other hand, about two-thirds of all respondents in Japan (71%), the US (66%) and India (66%) expect to pay some level of premium.

Green Barriers
When asked "What are the biggest barriers to adopting a 'green' approach when purchasing technology-related hardware for your organization?" IT decision-makers and IT influencers were allowed to choose what they perceived as the top two barriers. Here's how the barriers ranked globally:

  • Price (38%)
  • Disagreement internally/political (25%)
  • Efficiency will not offset costs (22%)
  • Brands not convincing us of ROI (18%)
  • Brands not promoting importance of "green" products (18%)
  • "Green" products not available (16%)
  • No impact on environment (12%)

Not surprisingly, "Price" was the top barrier in nine out of the 11 countries. The exceptions were Mexico, where "brands not promoting the importance of green" was the top barrier, and Italy where "disagreement internally/political" reasons were the top barrier.

Although price is seen as the highest barrier among all job titles surveyed, CXOs chose "price" as a barrier with lower frequency (only 33%) than Line of Business Managers (40%), CIOs (39%) and IT Managers (38%).

Green IT Purchases This Next Year
IT decision-makers were also asked to look at specific technology hardware (laptops, desktops, servers, storage and network hardware) through the purchasing lens of the next twelve months. 6 When faced with these products over the next year and asked "Will your organization look to purchase products that are considered 'green'?" respondents said they probably or definitely would look for "green" versions of these products:

  • Laptops (74%)
  • Desktops (72%)
  • Servers (64%)
  • Storage (63%)
  • Network Hardware (63%)

This global data shows that "green" laptops and desktops will be sought after more frequently in the next year than "green" back-end technology.

Globally, CIOs state they "definitely will" look to purchase "green" technology products of some kind this next year at a higher rate (48.3%) than CXOs (39.4%), IT Managers (37.3%) and Line of Business Managers (37.1%). CIOs also show a higher affinity for "green" laptops. They "definitely will" look to purchase "green" laptops this next year at a higher rate (38.8%) than CXOs (32.3%), Line of Business Managers (30.3%) and IT Managers (28.1%).

About GreenFactor
GreenFactor is a joint initiative between Strategic Oxygen, GCI Group and Cohn & Wolfe to illuminate "green" marketing opportunities and further "green"-focused research on a global scale.

This study will be repeated and expanded in the fourth quarter of 2008 when the team will also launch a consumer electronics study on a comparable scale. The long-term intent of the GreenFactor project is to build a progressive set of tools and frameworks that enable marketers to successfully position themselves and their "green" offerings. Additional materials and information on the results can be found at www.greenfactorstudy.com

For the purposes of the study, "green technology" was defined as having efficient power consumption, recyclable/reusable packaging, recycling offers for older equipment, use of non- toxic materials, or making investments in future "green" concepts such as alternative materials.

Brands included in the study were Alcatel - Lucent, Acer, Apple, AMD (not in US, Canada, UK, India or Australia), Cisco, Dell, EMC, Fujitsu, Google, HP, IBM, Intel, Lenovo, Microsoft, Motorola (not in US, Canada, UK, India or Australia), NEC, Nokia, Nortel, Oracle, Samsung, SAP, Sony, Sun Microsystems, Symantec, Toshiba, and Xerox. Countries included in the study were Australia, Brazil, Canada, France, Germany, India, Italy, Japan, Mexico, the United Kingdom, and the United States.

Methodology: In Q1 of 2008, more than 3,500 technology buyers were interviewed globally via web-based survey. Respondents represented employees at small, medium and large companies, including the Fortune 500. Respondents were paid for their time to fill out the survey thoughtfully and carefully. Incentive level varied depending on the respondent's job title and company size in order to access the hardest-to-reach targets. In order to qualify for the survey, a respondent had to have the responsibilities of a CIO, CXO (all C-Level executives excluding CIOs), IT Manager or a LOB (Line of Business Manager). In addition, they had to have been involved in the purchase of laptops in the last 12 months or in the next 12 months. "Purchase involvement" was defined as determining features needed or specifying technical requirements, evaluation or specifying products for purchase, evaluation or specifying where to buy, and/or recommending products or brands to purchase.

*Statistical Significance: using a 95% confidence level.

About Strategic Oxygen
Strategic Oxygen is a marketing intelligence company that is committed to improving the effectiveness of marketing communications by applying scientific methodologies-based on customer-centric research. In 2007, more than $5.5 billion of the world's marketing communications spending was based on solutions derived from the Information Network Engram (INE), Strategic Oxygen's patent-pending decision-making tool. The INE engine provides highly accurate marketing direction for technology brands using information derived from ten countries and 25 technologies. Currently, the INE tracks customer preferences for more than 65 brands. Strategic Oxygen is a member of Monitor Group. For more information about Strategic Oxygen, visit www.strategicoxygen.com

About Cohn & Wolfe and GCI Group
Cohn & Wolfe and GCI Group are sister companies in the WPP family of communications companies. Cohn & Wolfe is a strategic marketing public relations agency dedicated to creating, building and protecting the world's most prolific brands. With offices in North America, Europe and Asia, the agency creates and implements powerful communications programs that help clients build their brands and their bottom lines. GCI was founded in 1984. Its work is focused on high-value disciplines ranging from consumer and sports marketing, digital media and technology to healthcare and media relations. The firm is committed to breaking new ground in the delivery of sophisticated digital media strategies, breakthrough creativity, and practice area excellence. For more information visit www.gcigroup.com or www.cohnwolfe.com