Kevin Klustner, President, CEO, Verdiem

Kevin KlustnerEnergy savings is very much on the minds of cost-conscious IT managers
these days. Verdiem addresses an often-overlooked part of the energy
equation: PCs.

The Seattle-based company’s Surveyor utility helps IT departments
measure, manage and reduce its network’s energy consumption to save
money and lower the network’s total cost of ownership. Verdiem
claims it can reduce energy consumption enough to save an average of $20 per
PC annually.

Tech industry veteran Kevin Klustner has only been CEO of Verdiem
since March, but sees big potential in the company’s technology. Prior to
joining Verdiem, Klustner was the managing director of Coastal Environmental
Systems and president and CEO of Sightward, a venture-backed software
startup in Bellevue, Wash. He’s also served as the COO for
PC network software company WRQ.

Klustner recently discussed with the hidden energy savings to be found in PC networks and what other areas Verdiem is looking at to save money and maximize energy efficiency.

Q: What was the opportunity you saw that led to you joining Verdiem?

The company had spent a lot of time to make it scalable up to 100,000
nodes of PCs, and getting all the measurement verification and usage stats
right. We have a lot of intellectual property. They were getting a lot of
traction in the public-sector side, K-12 and universities, showing them a
way to save money. What I saw is a technology and business model that was
proving itself. And we have an ROI we can confidently predict has a 12- to 18-month payback.

Also, I saw a shift in the corporate world where
environmental responsibility is becoming a key objective. Verdiem solves a
problem sitting right in front of us in a very easy way. PCs and displays
waste about two-thirds of the energy they consume. People go away for the
weekend, for example, and fail to turn off their systems.

Q: But at least they go into sleep mode, isn’t that saving energy right

Most PCs do have the ability to turn off into a hibernate state, but
we’ve found that at most 25 percent really do and it’s usually more like 10
percent. We solve this problem by letting IT managers profile users based on
usage patterns and their time in and out of office to figure out the best
time to have the PCs hibernate.

For example, if your users generally all
leave at 5:30 p.m., you can have the hibernation set for 6:30 p.m. and come
back up the next morning at 6:30 a.m. Also, when IT wants to distribute a
software patch, the PCs can be all brought up at once and the patch
distributed, which IT departments like because they don’t want to have to
deal with individual PCs.

Q: What kind of savings are we talking about with Surveyor?

It’s going to vary by region depending on what your energy costs are, but
on a 5,000 PC network that, say, consumes 3 million kilowatt hours a year, we
can save approximately 1 million kilowatts. At about 10 to 12 cents per
kilowatt hour, you can save about $100,000 per year.

Q: How is a company going to be sure they’ll save the energy you’re
talking about?

We get very granular in our pre-sale work. We do a network energy
audit where we measure power consumption over two weeks, and then we install
Surveyor, without telling the end users, and compare the before and after
energy use. It’s pretty consistently worked out to a $20 savings per PC per

Q: And that’s just this idea of making sure the PCs are put to sleep at

Companies have a lot of options on how aggressive they want to be. You
can say, for example, go into sleep mode any time there is no activity for
15 minutes. The system comes back to life as soon as the mouse moves or the
keyboard is clicked.

Q: I have something like this on my PC and have for years. What’s new

People mistake when the screen saver kicks in; the screen goes blank or
runs a screen saver but the CPU is still working, the power hasn’t been
drawn down.

Q: Are you likely to branch out from a one-product company?

Yes. Today we’re on the PC side, but we could potentially address other
systems in similar fashion. On the server side and with other peripherals on
the network, there are energy-consumption issues. There are 5 million POS
 systems out there that are essentially XP systems that can
be turned off and on remotely.

Q: How big is your business?

We have over 100 customers and over 300,000 licenses. Those 300,000 PCs
running Surveyor are saving 60 kilowatts of electricity or 40,000 tons of
CO2 emissions — the equivalent of what 8,000 cars burn or 88,000 barrels of

Q: What about overhead and installation time?

There’s very little. When an organization purchases Surveyor, we work
with them to install it and set up the profiles they want. Depending on how
aggressive they want to be [with the settings] it can take anywhere from
half a day to a day. We just piggyback to whatever software deployment they
use to distribute software updates.

For example, many use SMS, and Surveyor
has a very small footprint. In terms of ongoing overhead, you can set it up to turn PCs off remotely at a
certain time and forget about it. There’s no bandwidth issue or any need for
help desk calls. If an end user comes in early when the system is off,
they’ll see a simple dialog box to override the shut down.

Q: How much does the system cost?

It’s a licensed product with volume pricing. Basically, it’s $25 per PC
one time and a $3 per year charge for maintenance and energy audits to
evaluate how well it’s being used. The clients report to an SQL database on
a regular basis and we have analysis tools that can show companies where
they can be more aggressive.

Q: Who are your competitors in this space?

We see our competition from companies in the systems management space
that have developed asset management software that does a little of what we
do. No one else out there is as focused on PC power management, with as
much detailed measurement and verification, as we are.

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