Will the energy transition and total cost of ownership impact software soon?

Blog  — Wed 13 Sep 2023

In the face of climate change and the urgent need to reduce our global ecological footprint, we find ourselves in the midst of a crucial period of change. The energy transition, which aims to reduce our reliance on fossil fuels and promote the transition to sustainable, renewable energy sources, is now more than just an ambitious vision. It has become an urgent reality.

Across the world, we see the rise of solar and wind energy projects, the shift towards electric vehicles, and a growing awareness of our energy consumption. This energy transition not only impacts how we produce and use energy but also has profound implications for the world of information technology (IT) and software development in its wake.

In the late '90s, the IT industry underwent a dramatic acceleration, both in terms of software and hardware. Networks expanded globally, including the installation of extensive fiber optic cables on the sea and ocean floors to connect continents. Data centers sprouted up like mushrooms. The influence of IT systems spread to all corners of the commercial world, from supermarkets to automakers, and even government agencies, ranging from municipal departments to the tax authorities.

Since the '90s, the IT sector has grown exponentially. The demand for software was insatiable, while the number of programmers always fell short. It seemed like 'the sky is the limit' was the motto. Energy was cheap, and computers doubled in power almost every year. Bottlenecks appeared to be limited to how quickly chips and software could be developed.

But times are changing. With the energy transition on the horizon, it seems inevitable that reflection must take place. Energy that is not needed does not need to be generated. Since this advantage works both ways, it is undisputed that in the coming years, attention will shift towards more energy-efficient hardware. This, in turn, will result in a greater demand for energy-efficient software that achieves the same results with fewer operations and calculations.

Currently, software development is primarily focused on manageable initial investments. Thanks to the use of so-called "libraries" or "frameworks," the required functionality can be offered generically and with low barriers, especially when various components are combined. What has often seemed to weigh less in this context is the 'total cost of ownership' (TCO).

Comprehensive software requires powerful hardware, which results in more calculations, storage, and network communication. Each of these elements affects the TCO, also due to energy consumption. Therefore, it will be interesting to see if a tipping point can be calculated where the initial investment is no longer the leading factor but the 'total cost of ownership.' More efficient software will not only enable more efficient hardware but will also require more specialized developers.

One thing seems certain; perhaps we have reached the peak of the 'wild west' in the digital society. This year might be the turning point where, for several reasons, a renewed appreciation for technical purity slowly emerges, reminiscent of the focus on technical details in the '60s and '70s. And, in my opinion, that is something to look forward to because it offers many more benefits than just energy efficiency and TCO.