In September 2009, Stephen Kelly unexpectedly resigned from his post as CEO of application integration and development tools vendor Micro Focus, one of the UK’s largest IT companies. Unheard of in the industry since, in July 2010 he re-emerged as the director of UK carbon management software vendor CloudApps.
The CloudApps application, which allows businesses to track and manage the carbon footprint of their operations, is based on Salesforce.com’s platform, and the company’s chairman Dr Steven Garnett – a veteran of Oracle and Siebel – is also Salesforce.com’s European chairman.
Kelly, who was also previously CEO of US customer relationship management vendor Chordiant, says he believes the green technology space is ripe for the kind of rapid growth strategy that he and Garnett learned from their Silicon Valley former employers.
“There is a blueprint for how to grow companies, and the Americans have done it very well in the tech space,” he explained. “I don’t think there’s a better embryonic space [for it] than sustainability and the green tech agenda.”
Not only will the cloud computing model allow the company to grow quickly, Kelly argues, it will also keep its own carbon footprint down. Kelly claims that to execute a given IT workload in Salesforce.com’s data centre consumes around 2% of the energy that it would in a traditional client server environment.
Before he left the company, Kelly launched the ‘Micro Focus Technology Manifesto’, an initiative to create 250,000 new jobs in the UK’s IT sector by encouraging entrepreneurship, investment and collaboration between industry and academia.
That campaign has withered somewhat since his departure, but Kelly continues to champion the cause. “There are 1.5 million IT jobs in the UK, and I don’t see any reason why that can’t be two million or even 2.5 million,” he says.
He believes that green tech represents a particularly fertile opportunity for jobs growth. “There is tremendous potential around green tech and sustainability, and software and IT will be at the heart of that,” Kelly says. “This could be an area where the UK leads the world.”
Not everyone is so optimistic about the future of green tech. In July 2010, an independent body that advises the government on environmental issues warned that without adequate public sector funding green tech initiatives may fall into “a valley of death”.
The warning followed the Department of Energy and Climate Change’s decision to cut £34 million of investment in technology-based projects.
Kelly takes the opposite view. “Any potential reduction of government financial help will be positive and will force UK green tech players to shape up,” he says. “European entrepreneurs want their governments to provide consistent policies rather than hand-outs. The cream will come to the top and the weak will wither.”
The green tech industry has attracted a degree of interest from venture capitalists (VCs) so far, but according to analyst and author Vinnie Mirchandani (see Think Bigger), many are finding that their investments don’t yield a return as quickly as they might in the traditional IT space. “Compared to IT companies, it is taking green tech start-ups two or three times longer to get to the next liquidity level,” he says.
One reason for this, Mirchandani explains, is that an IT start-up will often find a pilot customer that will share some of the cost burden. “If you look at green tech, there is no mezzanine level of investment.”
Although it is both a green tech and an IT company, it is notable that CloudApps is self-funded by its own founders and directors. “CloudApps is a software company built without the demands on their capital that VCs rightfully require for their risk,” Kelly explains. “As seasoned IT executives we took the risk ourselves. And we believe we are on track, with or without government help.”
That confidence is based on a belief that monitoring carbon emissions will soon not just be a matter of corporate social responsibility, but one of dire necessity. “Europe’s future energy supplies are widely recognised as far from certain,” Kelly says. “The ability to measure, monitor and act on carbon consumption will not be optional.”