Techstrong Gang – August 29, 2024

Hi, everyone. Happy Thursday. I'm back.

You are back. Broadcom is back. OpenStack is back.

What else can we actually talk about? It's Textron Gang. Hey everyone.

Welcome to Textron Gang. I'm Alan Shimel. Happy to be back here in the seat in our Boca Ratone studio headquarters.

As I mentioned, we've got news on what's going on at VMware, what's happening with OpenStack, and we also have an interesting segment from Bonnie Schneider, our controlling scope, three emissions and lot, a lot going on there. Uh, it'll be a great text on gang. We've got a great gang light up as well.

Let me introduce you to who we have on for today. First of all, joining us from out Las Vegas at the vm, the VM world, I guess, or something like that. It's vm VMware Explorer these days.

Oh, VMware Explorer. Okay. Uh, he's been filing a ton of, uh, of, uh, articles on this across the text trunk sites.

It's our Chief content officer, Mike Baard. Hey, Mike. Welcome.

Good to see you. As always. Thanks for joining us early out in Vegas, speaking of early out west.

Next is our man with on the, as his finger on the pulse of Silicon Valley, our roving editor, John Schwartz. Well, spiffy with a new haircut. Hey, John, how are you?

Oh, Hey, how's it going? We did a Hey, yesterday. We did a all remote show.

We missed you, uh, you, Alan and, and Mike. Yes. Uh, but we did an all remote show.

Really interesting. I, I did actually watch it and it was, it is cool. I'm sorry I couldn't make it.

I I had my own misadventures in, uh, airports in New York, but we'll leave that for another day. Um, and then moving from the west coast to our Colorado crew. Um, happy to have back on while he was on actually two, but it's his first day back with me, Mitch Ashley, our, uh, CTA and CTO here at Tech Trunk CTA with future Rupe Mitchell.

Great to have you on. Good to be back. No space flights from SpaceX, but good to be back.

Absolutely. Also, joining us from Boulder, the Republic of Boulder, Colorado. Can't believe they, you have no scope three emissions from Boulder.

I'm just watching. Yes. We can go over controlling scope three emissions in Boulder because they've outlaw all emissions in Boulder.

You're not even allowed to exhale. Just these, just those things. Uhhuh, Camberley Bates and Kimberly, you're a CTA at Futurum as well.

Is, is that correct? Yes. Yeah.

Yep. And an analyst. Yep.

Absolutely. Great to have you on, Kimberly. Thank you.

Joining me here in our book of headquarters is our sustainability and green it, uh, analyst and editor Bonnie Schneider. And she is going to be talking about controlling scope three emissions today. Bonnie, welcome.

Thanks Alan. Great to be Here. Great to have you.

Alright, let's jump into it. You know, Mike, well, let's throw it out to you. You're covering, was it VMware Explorer, vm, world Explorer, whatever.

I know. Um, uh, Broadcom, CEO Hank talk spoke yesterday. I think it was yesterday.

My days are all messed up for my travel adventures, but It would've been Tuesday. Yes. So it's Tuesday, two days ago.

Um, but, you know, give us the scoop from out in Vegas. Well, I gotta say it's been entertaining at the very least, um, about five minutes into his keynote and hock 10 from, um, Broadcom, who's the CEO stood up. And, you know, it was surprising in the sense that he was actually rather charming and he has a reputation for being, you know, rough and tumble.

But, um, he was funny and one of the things he got up and said was that everybody in it is suffering from PTSD because CEOs had these ICS that says, thou sh get rid of your data centers, move everything to the public cloud. And now, um, they're struggling with cost issues, complexity, compliance, and everybody's kind of not having a great moment. And all of this was to point to, uh, VMware Cloud Foundation, at least the latest version of it, which to be honest, has always been a bundle, right?

They have, uh, compute products, storage and networking stuff, and, but they were never tightly integrated. And now, you know, finally they're getting around to that and they got rid of like a dozen consoles and now you're gonna have one console to manage this thing. And that's probably a step in the right direction, I might argue overdue.

But Kimberly, let me kick it to you. 'cause I know that, you know, you've been around this public cloud thing for a while and so, you know, are the cloud service providers responsible for all this PTSD? Were suffering?

What's going on? Well, first of all, as a military family that I've been in, I kind of objected him using that terminology. Amen.

Um, so I, you know, especially since I have got a nephew that was shot in Afghanistan, my father took shots in Vietnam in World War ii. So, you know, sorry guys, but that's not PTSD. Maybe there's a layover of saying a little regret for some decisions that have been made because of the cost.

Um, but I don't think anybody's gonna violently take somebody out because they moved to the, uh, the cloud. But with that said, let me move on to something else that didn't have any vi visually reacting to what was said. Um, I think that we've been into talking about consolidation forever.

Consolidation has always been a savings, but the flip side of consolidation is vendor dependency, blast radius, all those kind of things. So it's a natural progression for VMware to more so bundle. I mean, they, initially, they were selling VC in separately NSX separately, but if they're not gonna sell those things separately, you know, by gosh, they'd better put it into that entire system and bundle it all together and, and make it more efficient and effective for them to utilize.

So it's a question about how does the enterprise want to implement these systems and do they wanna be that reliant in that environment on those two other critical systems, which is my storage, which has usually been separate in my network, which has off often been separate as well. And, um, so I think what co t is saying is, am I delivering best of breed and is best of breed, or if I'm living best of breed or good enough, is that good enough for my VMware environment? And it could very well be.

So, um, and if you can show me a better TCO than doing it separately, then maybe I'll do it. We've seen it. Absolutely.

Kimberly, first of all, thank you to your family for their service, and I do agree with you. PTSD is not something we should throw around lightly. That being said, I, I, I, I had a, well, not as strong as a reaction as you did, but I, I also had a reaction is, you know, look at the guy who wants us to move to private cloud saying we have PTSD over using public cloud.

It's a little self-serving. He might, he might have tried to put a little velvet around the fist, but, Hey, can I, Helen, can I jump in for a second? Because evidently, and Mike, correct, correct me if I'm wrong, Mike, but did Tan also say that silos of data center tech have left tech teams screwed ba Basically what I'm trying to get to is that's Morehead ptsd.

Well, part of it, Yeah. Right. So I just wanna make sure he used that word.

Yep. Yeah, no, he was, I I just Make a quick Point in his language if that's what you're looking for. Yeah, but that's, I don't Think that's kind of what I wanna say is that, oh, let me just say one thing.

I'll, and I'll, I'll get outta your way. So, so Patrick Morehead, who's a very well respected analyst that we all know, put it pretty well, he said it's been a long time since he's seen a CEO drop so many, uh, direct truth bombs in a Q and a. And I think Tan went on to say that CEOs have fell in love with the promise of Public Cloud a decade ago and directed their IT team teams to adopt it.

But since then, they've learned that, as you said, Mike, it's costly, complex and hard to, to, um, meet compliance. So what my only point is that he is doing this kind of, um, rough talk as a CEO selling a product, because I think he also mentioned that the fix for both problems that he had mentioned is on-prem, it and oh, conveniently, VMware's Cloud Foundation Suite does that. So I think there was was someone else, and that's The point I was Making calculations.

That's why you wanted come in. Let, let's, let's clear up some of the technical facts here first, and let's get rid of the hyperbole. So what they are pitching is that VCF can run anywhere.

You can deploy it on any public cloud, you can deploy it on any on-premise environment you want, and you get portability and flexibility. And they're trying to replicate a cloud environment that can run anywhere. Because when you go to the cloud today, I mean, there isn't really somebody up there who runs networks and storage.

It's one integrated team, and you kinda run that as one cohesive unit. And they're saying now you can have that same kind of operating environment anywhere you want. They are arguing that, um, the cloud is challenging and there's more of your data.

They're making a data gravity argument for how the, on-premise side of the thing where they're saying, look, this is where your data already is, and this is where your compute is, and you need to bring these teams together and lower the total cost. Now, that is also, you know, the part that they're not talking about during the keynote is this whole issue that they're having with people objecting to the way they changed the licensing terms. You used to have a perpetual license for VMware, and now you're having a subscription license.

And for a lot of people that's more costly. Over time, Broadcom is arguing that we're delivering more value for that increased cost because you're getting more software and more components. Well, it, it's not just more value.

My, look, I, I was a vendor for many, many years and this, this is the same old argument. Yes, my product may cost more, but your total cost of ownership, your TCO is going to be lower. And that's what they're saying that moving from the perpetual license to, to this new model, your TCO.

So I would, I would bring up to the TCO and I, I agree with you, ed, when TCO, you know, typically when we have done as an analyst firm have done TCO analysis, we've stuck to the hard numbers and we've added some of the soft numbers, which is usually the operational expenses kind of thing that you have in there and into this space. There is some hard numbers. I mean, we haven't done the full VCF piece of it, and I suspect that they presented some of those numbers there.

Um, we'd like to peel those apart and see what they're looking at. But we have, I, our team looked at looking at, do I use a vsan kind of environment or do I use a network attached storage there? And by the way, it was less costly.

Um, so it, and but now that's a little bit, that was a while ago. I'm not sure what it looks like now, uh, with the new VCF costs, but at that point in time, there was a value proposition. Now the tradeoff was, was the functionality of VCN enough to compensate with some of the functionality that I might have gotten with Network Cena.

We didn't do it with NSX because I didn't play in that space. Um, but I suspect there might have been a similar kind of, uh, conversation along those lines. So I think, you know, let's look at what hard TCO analysis looks like and then understand what the trade-offs are from a, um, as again, a vendor dependency a glass radius in, in the operational systems.

That's a really good point, Kimberly, because it's sometimes is even more important what you don't include in your TCO, your total economic value analysis. It sounded like spreadsheets. You can make spreadsheets say whatever you wanna say, right.

If you could, you, you cast it the right way. So, and I think that there's a bit of that happening here is it's hard to believe that, you know, we're all living in a world of, uh, whatever regret about moving to the cloud. I think, I think there is truth to the great data gravity and location and not wanting to move data around if it's already located in private data centers and wanting to be able to do, to, to do more a cloud-like private cloud in the data center.

From my standpoint of coming from trying to move an IT organization into the cloud, this is what I wanted. And we were a VMware shop. This is what I wanted from VMware in 2012, is make my private environment look like my public environment.

Yep. And then I'll stay on VMware. VMware.

And that's, that's a simple ask that's very complicated to deliver, obviously. But, um, you know, the, the pricing model, Mike, is, is, is a double-edged sword, right? 'cause it can cost more overall.

But for people who are tighter on capital, uh, crunch flow, uh, crunch on capital cash flow these days, there may be some areas where they can save capital expenditure, uh, using the subscription model. So there are advantages to that as well. And it's not a, it's not an isolation, right?

Because to your analysis, you were talking about Kimberly, you can look at part of it and you can say, this is what this part looks like. But now we add in the, in our network, we add in the storage, we add in security, we add in the other services that we're gonna have to buy and run locally that we could purchase off the marketplace from a cloud vendor. And what does that cost?

What's the cost to run those? And the integration of those things in the cloud environment versus my own. And whenever you're doing it in your own environment, you're doing it all.

Uh, you may be hiring people, vendors and such to do that. So it's, it's, it, it's an answer, uh, looking for an audience to, to promote that on answer. And I, and I get it why he's saying that.

So, but just put it in context. But To your point, to your point about that also is the, you know, most IT teams already have storage and networking stuff in place and they have people who are trained on that and skills. And you know, lifting that out and replacing that stuff is not easy.

And people have attachments, right? So there's people who are Cisco shops or their HPE storage shops, and just because the somebody put a spreadsheet in front of 'em doesn't mean that they're gonna rip and replace that stuff. Absolutely.

You know, the other thing is we often see vendors pointing to cost of cloud that public cloud's more expensive than private cloud, et cetera. You know, and I think this was a mistake or a fallacy that came into common IT culture some time ago, that the cloud public cloud saves money. I don't think that was ever the case.

I don't think the public cloud saves money. I think the public cloud gives you burstability elasticity, scalability, and a shared model of responsibility on things like, uh, uh, security and, and architecture and and so forth. And there's trade offs involved.

But if you're just saying, look, the public cloud said it was gonna be cheaper, and it's not. I, I don't think you're being totally honest either. No one, it's not cheaper, but it does offer you some advantages.

The other thing I would mention, and I know in our notes here, there's a cloud native, uh, now article on Zu being revamped. And did that come out this week as well, Mike? Or that's That?

Well, you know, they're kind of talking out both ends of their mouth on that one. You know, That, that's what's gonna be my point, right? You, you want your cake and you want your ice cream too.

Um, and because wasn't that the promise of Kubernetes and containers that we could run it on bare metal and we could run it private public in space or anywhere else on the edge, Right? But at the same time, they will tell you, you can also run Kubernetes on VCF and you'll get the isolation on virtual machines. And isn't that a wonderful thing?

So, um, you know, and they bundle it in there as an extension or what they call advanced services or whatever. So, um, you know, on the one hand you could say, you know, they're trying to be all things to all people. And on the other hand, they're trying to say, you know, well, if you really must, we have Tanzi.

I think there's another thing that was emphasized in the announcements was the AI capabilities. They, they announced, you know, some AI products, but also there was assumption of, yes, there's an assumption that in your private data center, you're gonna invest in a lot of AI hardware. I don't know, is that, that, that seems to me a great instance of let's do those things in the cloud first if we can, and before we go point out a bunch of change to find out what we're investing in isn't the right thing.

Right? So there, there's an a lot of assumptions around everything belongs back in the private data center, which I don't think is true. Well, I think we also understand what hardware is going to be used on premise, because the big amount of hardware that's being purchased right now had been purchased right now is for the LA LLMs and Foundation models.

And that's, you know, whatever hundreds, couple of hundred companies, maybe 300 companies are doing that. The, when we come down to the enterprise, that environment that's gonna be doing rag or the rag rag work, um, in, in creating their, you know, taking that foundation model, whatever, that's a much smaller environment. It's not using a massive hundreds of GPUs.

And so I think that's kind of understanding what that data pipeline kind of thing that, of course, I'm a data person. The data pipeline looks like it's, is important to understand what kind of gear is gonna go in there at the enterprise. So it's much smaller than what we've been seeing.

I would point out there are a lot of hardware vendors here at Chair and Hawk on. They're like, yay. Oh, I bet bet hard Hardware is sexy again.

Yay. But hardwares Gone sexy again. We can need him to be successful.

So from a, you know, from an analyst perspective, is I, I want to see him successful. I wanna see Tan Zu successful because we need alternatives to just OpenShift. If we only have OpenShift, we're gonna end up in the same place.

We just ended up with VMware being the only selection, or, or, you know, sorry, suse. I mean, I know SUSE is very strong in Europe, but over here, over in the United States it's OpenShift. Yeah.

Um, and we need one option. And OpenShift is that major lift. It's a big lift.

Yeah. Absolutely is. You know, we're gonna talk about something related to that OpenStack in in our next segment.

And it's about time for that. We're gonna take a break here on Textron gang, we're coming back at you with what's up with OpenStack? It's, it's back.

I don't know. We'll see. Um, you are watching Textron Gang Cloud Native now is the web's leading resource for the growing cloud native ecosystem.

com is your destination for news, thought leadership, features and webinars on cloud native architecture, Kubernetes, serverless, cloud native application development, microservices, service mesh, cloud native security, and more. Stay on the cutting edge of modern application development at Cloud Native now. All right, folks, we're back and we're continuing to talk a little bit about cloud infrastructure, but this time it's all about OpenStack.

Ever since this whole controversy involving Bmware showed up, the OpenStack community's been kind of drum banging the drum a little bit saying, Hey, we're back and we're an alternative over here. And uh, this week Red Hat delivered an instance of OpenStack that runs natively on Kubernetes. All the components of OpenStack are now, uh, essentially microservices that you can deploy and chooses you'd want on top of Kubernetes.

And this whole tension between OpenStack and the Kubernetes community has been around as long as I remember. But Kimberly, let's get started with you a little bit. What is going on with OpenStack these days?

'cause I feel like for the last few years it was kind of quiet. Well, from what I understand, it has been quiet. It's been quiet in the United States.

Um, we saw, um, it's with my prior company, we had quite a few it end user companies that had implemented or tried to implement OpenStack. And this is going back to 20 20 12 and, and those kind of dates where they're, and they're trying to provide cloud-like operations for their, uh, folks there. Um, a lot of those just kicked it out, um, because it was too difficult, um, over in Europe.

It was well received. Um, and they have put a lot of resources into OpenStack. So it's, it's alive and well over there.

And, you know, I understand and I think, you know, Mike more, it's very live and well in the tech, in the tech, the, um, telco industry as well. So I think that's where it is today. So this is, uh, evolution I guess of, you know, keeping OpenStack alive and, and part of the, the conversation and part of the implementation.

But maybe not for just, you know, you know, the, the everyday enterprise that we, we see here in the United States. That's a good point because, 'cause Open Stack is a major technology for the telecom industry and they made early investments in it to kind of get it where it is today. A lot of it's driven by N of V network.

Uh, function virtualization is, the network has been virtualized operating in it. But what's interesting about this is there is a trend of running infrastructure on Kubernetes instead of Kubernetes just on infrastructure software, if you wanna think of it that way. And, and some of it is because of the manageability or the, the, you're kind of moving from a monolith piece to piece of software that's infrastructure software to managing it in more componentized services orientation.

So we we're not necessarily getting a better Kubernetes in OpenShift where we're getting, is OpenShift a better OpenShift running on Kubernetes? 'cause it's more manageable. Yeah.

And I think that point is critical. 'cause one of the issues with Kubernetes, despite, you know, various claims to the contrary, is it's, it's hard to manage that puppy and it still requires engineers. And it's not something in my mind just yet that the average IT administrator's gonna be able to run.

I mean, there's some gooey tools, but they only take you so far as far as I can see. And, um, as a result that I feel like that's constrained the adoption of Kubernetes even though it's 10 years old. Because I have to have the people and the skills to deploy it before I can even get to the benefits.

Well, I'll, I'll solve it. I'll check my, uh, Excel formula. But I believe if you add a complex system to another complex system, you get a simple, But lemme check that verify Complex.

Wait a minute, wait a minute, wait minute. But my, but my TCOs better. It's better.

So, so I wanna just point out a couple things. It's not just OpenStack running on Kubernetes. It's OpenStack running on OpenShift.

Yeah. Which is Red Hat. Yes.

Right. And, and, and, you know, let, let's be clear about that. And then Mike, you did an interview with Mark Coley or the, uh, the head.

He's from open the Open Infrastructure Foundation, which is sort of the managing foundation Mm-Hmm. For OpenStack. And then I met with Kevin Carter, who appears to be the champion there at, uh, Rackspace, who said, Hey, we are, we're back in the OpenStack camp.

And we're, we're we're big believers in the Open Infrastructure foundation and we, you know, we were one of the original OpenStack, uh, patrons and we're going to, you know, we're back and, and doing this in a big way. Okay. And, and he laid out a whole bunch of different offerings, enterprise grade offerings that they're rolling out now on, on OpenStack.

I don't want to get into my foundations better than your foundation, but I don't know, I, I don't hear a lot about the Open Infrastructure Foundation. Is it just OpenStack or is there more to it? Do they have the critical mass?

I mean, you know, where the Linux Foundation and cloud native, you know, and the door foundations for LF are out there and you, you know, they're pretty well funded and they getting the job done. Is the Open Infrastructure Foundation, is it helping or hurting OpenStack? Would it be better in, in a Linux foundation?

It might be better because you would get more cross pollination across Kubernetes and OpenStack. So I think that might be helpful. On the other hand though, the CNCF and all that stuff, you go look at the number of projects they have in your eyes crossed and it's very hard to manage all that.

So there's an argument to be made for focus, um, with one like consortium focus specifically on OpenStack. I don't really know how many folks who are working on both who are kind of sharing knowledge behind the scenes with each other. That would probably be a good thing.

But I think you can assume that a lot of the things that Red Hat did to run OpenStack and Kubernetes will be contributed back to the OpenStack community. And then everybody will benefit. But right now, of course, they're doing their standard thing which says, you know, license all your open source stuff from us because we'll take care of you in it's complex.

Well, they did rebrand in 2023, right? They were Open, open Stack Foundation. Now they're open infrastructure.

So I think the intent behind that, 'cause I went to that conference last year and that's, their intent has become more than OpenStack. But let's be straight about it. It is some 90 plus percent OpenStack and it's OpenStack at very large scale.

'cause when you're talking about telecom and banking and industries that are using OpenStack, they're not putting it it in a few data centers. They're running very large implementations of it. And so it, it has, in some ways, it has a narrower focus, um, to be able to scale to those kinds of business applications.

Um, will it become more other open infrastructure then you're kind of getting into the, the Linux Foundation game. So to me, that part of it competes with Lennox Foundation. Agreed.

Um, I, I think, you know, and then on the Rackspace piece of it too is, you know, is this hot and cold running water? How long is this hot water running? Uh, because, you know, they've come and gone before kind of thing.

And, and I, that was my, in talking to Kevin Carter, as I mentioned, uh, I didn't, I specifically ask him that question, but a similar question. And he said, no, it's an ironclad commitment to OpenStack and a future of OpenStack. But in many ways it, it goes back to the previous right VMware thing.

Are we seeing vendors say, Hey, the, the, the bloom is off the, uh, public cloud, come back home, come back home to the private cloud, come back home to your own data center, look at all these great old big tools we have for you to use. Um, and maybe, maybe that's a, maybe there's a story there. John, what do you think?

I, you know, from my my perspective, we're in a multi-hybrid cloud environment and that's it. Now we, we've heard the numbers, um, or I've heard the numbers of being somewhere between 60 and 80% is still on print Anything Or the enterprise. So, you know, if we start slicing and dicing the different companies, you know, the, the big enterprises are still on prep.

Um, and the crown jewels are still on prep. You know, SMBs have probably moved up there. So I mean, we are in this hybrid environment and we're going to be, um, I don't think it's, it's gonna stop or it's gonna slow down.

So I, why, I'm not sure why I would argue this, you know, if I'm consulting with a vendor, you know, they've got to have a joint strategy because the customers are going to look for a joint strategy where the best placement is for, it's whether or not, you know, the enterprise is the, you know, one of the biggest applications for, you know, doing, you know, multi-cloud or hybrid cloud is, is going to be data protection. I use that as the poor man's Dr you know, the other areas I'm looking at is this, you know, do I do started my training up with AI up in the cloud because it's less expensive where I can get ahold of GPUs? Probably.

Do I use global file sharing where I need to be able to share files into the very, very broad cloud environment? You know, so there are certain applications that make sense to say it's gonna be hybrid and it's, let's, let's kind of embrace both sides of it and not choose, you know, winners and losers on this. I think I Agree.

Sorry, go ahead. No, I was just gonna say, uh, uh, spot on Kimberly, and there's also new use cases that validate increase the need for hybrid Edge being a perfect example, right? Edge is not gonna be in your data center obviously, but you wanna run as much common infrastructure, uh, concluding Kubernetes or K three K zero as well as I'd like OpenShift at the, at the edge, if that's what I'm running in my cloud or my cloud and on Rackspace, whatever it looks like.

Sorry. I'm sorry Mike, go ahead. Well, here's the irony of this whole thing in my mind.

And when I was much younger, they used to tell me that, you know, nothing good happens when you move data. And then the cloud came along and we were moving data into the cloud, left, right and center, and we had these appliances called snowballs and we were doing all this stuff. And um, you know, but the maxim back in the day was, you know, if you move data, you have security issues, your costs will go up and things will become more complex.

And here we are now, it seems like we're coming full circle with the rise of ai. We're talking about bringing the compute to the data again. And I think, um, every vendor out there is trying to ride that curve, whether it's VMware or OpenStack or whoever.

They're like, woo, we're gonna bring compute to the date again and we gotta refresh the compute. And I, I think there's wisdom in that advice. But now, you know, we've done the cloud for 10 years now where the cow is half over the fence.

There's data in the cloud and there's data on premise to Kimberly's point. So you could argue that, you know, um, not so much that, um, we are screwed as, uh, Mr. Talk was talking about because of the cloud.

We're just screwed on both ends of it. Well, and there's no such thing as pregnant half married. Absolutely.

Alright, hey, let's take a break. We'll give this one a rest. We're gonna come back and as we've been touting all, all morning, we're gonna talk about controlling scope three emissions.

You're watching Textron Gang. Hi everyone. Welcome back to the Techstrong Gang.

Well, there's a type of carbon emissions that you may not be familiar with because this isn't the type of direct emission that we're used to controlling in our daily lives, or even at work like when we turn off the lights or, uh, reduced power. These are known as Scope three emissions and they encompass everything that's not even a direct cause let's say, of an organization meaning emissions that are released throughout the process of the supply chain from transport delivery. It's a lot to take in and a lot to account for.

And companies are really grappling with, how do we calculate this? How do we mitigate the risk of all these emissions? And with changing regulations that are happening in Europe and in the US it's becoming a priority for companies.

So I decided to take a closer look at Scope three emissions to better understand what they are and also what are organizations and the top tech giants doing to, uh, reduce them and report them. Tech companies are battling an invisible giants Scope three emissions. These aren't just the carbon output from office lights or server rooms.

We're talking about the emissions lurking in every corner of the supply chain. From the rare earth metals and chips to power fueling customer devices for DevOps, cloud AI and digital transformation companies. This problem is particularly precarious.

Your products may be virtual, but their impact is very real. Plus the urgency to address Scope three emissions is palpable from government mandates like the eus corporate sustainability reporting directive to investors demanding transparency. Identifying and reducing indirect emissions is a rising priority.

How are tech companies handling these issues? Microsoft is leveraging its cloud capabilities to develop and advanced carbon accounting tools. Google is working with suppliers to decarbonize its hardware supply chain, and Amazon is revising packaging to produce less waste.

The race to reduce Scope three emissions is also spurring innovation like carbon aware software that optimizes for low emission periods for organizations just starting the journey to reduce Scope three emissions. Don't wait for the perfect data, start now. Engage your suppliers.

They're likely facing the same pressures you are. Blockchain ai, IOT and remote sensing can offer unprecedented insights into Scope three emissions resulting in better measurement reporting and reduction strategies. Those who crack the code will not only future proof their business, but also unlock new markets for low carbon innovations in an increasingly climate conscious market.

Well in the video I mentioned Microsoft, Google and Amazon and what they're doing to calculate scope three emissions. But also this really is a huge issue because it encompasses the whole supply chain. So there's so many different players involved in calculating these emissions and understanding it.

And that's one of the reasons that we saw a delay in some of the sector specific reporting for the corporate sustainability reporting directive out of Europe because it is such a big issue to take on. But regardless, these emissions and this reporting for global companies that are doing business in Europe or based in Europe in 2025, are going to have to start reporting this. So it's, it is coming to the forefront.

You Know, Bonnie, it's interesting. I I did not know the scope of Scope three, so to speak. I didn't realize that it encompasses business travel employees commuting use in disposal of products, transport and distribution of goods and services.

And I think there was a statistic that 75% of the emissions generated by all businesses fall under scope three. Um, it was kinda staggering. Also, you've mentioned the eus corporate sustain sustainability reporting directive.

I, so from what I understand, the SEC's new rules do not extend regulatory oversight on Scope three reporting, but they eventually are gonna move in that direction. There's A lot of, must be a huge, they were supposed to have a decision on that within the past year, but it hasn't happened. There's been pushback politically.

So, um, it's not firmly noted there, but if you look at the state of California, there are some more, um, regulations coming in regarding carbon emissions. But Scope three is an entirely different animal because it is such, uh, encompasses so much. And I think we'll see more of, of the Scope three reporting talk about I think into 2025.

But, um, it is something that the major tech giants are dealing with now and something to think about as you kind of whatever business you have. 'cause it affects the whole supply chain, the whole process. And I'm really happy that actually doing this and not because of the technology of the technologists and Google and those kind of things, but I think that scope three or actually looking at impact, um, as we look at creation of, um, technology has a much bigger understanding.

And, um, so I'll, I'll take on two, two big industries that are very controversial. We could be very controversial. One is ev um, cars and the cost of mining for cobalt and everything that goes into those things.

And the other one is wind farms and the cost, which is not measured in Scope three, but it's the cost of the environment. It's the cost of the water, it's cost of the, the animals, that kind of stuff that are going on. And me being in Colorado and knowing that the state right up the street there, Wyoming is putting in these massive open fields that are out there, these wind farms is kinda like going, okay, so why isn't the environmental people screaming and yelling about the animals and, and the what's going on with what's going on up there?

You know what, they'll scream and yell about mining, but they won't scream and yell about about a wood farm kind of kind of thing. So I think this is indicative what we're talking about is scope three is indicative of what we should be doing in all industries and looking at what does it take to create something from end to end to deliver a, a goods to the market. And that that also includes, I think, and I know I'm way off the deep end, and also that also includes labor.

It includes the labor that we use to wear the clothes, the clothes that we're wearing here, what labor we're using. That's that's a great point. And it goes into the agriculture industry and I was just thinking, um, and uh, the, uh, book that I wrote, I about climate change, I really dug into the coffee industry and that's another place where you, you're dealing with the environment and fair labor and things like that.

So yes, I do think you're right, Kimberly. It's, um, it is end to end and it affects, it, it affects the, the whole supply chain, the whole, but including people as well. I mean, they aren't doing stuff when animals or at least they're trying and yeah, I will just reveal that.

Yeah, I do read weird scientific journals from time to time, but um, they're purely are trying to re-engineer how cows chew grass so that they, uh, eliminate less Mike. Yeah, That's, that's Way off of the technology discussion. Yeah.

Somehow out here guys, we went, but this is what, It doesn't happen in Nebraska and Iowa. Come on. No, that regenerative agriculture is huge and that is the part of a lot of, um, or a scope three, you know, and, and mitigating that risk.

Mm-hmm. Good friend of, uh, of, uh, Alan's in mind, Terry SW started a company a few years back, 10 or more sustainable mines all around the manufacturing process and the goods that go into manufacturing. So the whole value chain before it ever becomes something that you use either in subsequent, you know, creating products from, from or consume as part of a business.

And, uh, she was in town a couple months ago on a construction engineering and manufacturing, a construction engineering and design conference, um, sort of taking things beyond the leads standards and some of that, it, it is so complex and all the things that go into it, you know, you can't solve it in one or two or three, four steps. You have to just keep whittling at it, kinda like a quality issue or making, improving quality is tackle it where you can make a difference now and start to make a difference later. Mm-Hmm.

Well, you know, I'm sorry, Go ahead. It's funny, I was talking about this with some IT guys, you know, and they were like, you know, looking at me, we were having the conversation and their eyes rolled and, uh, they looked over and they said, you see all those trees over there? Those trees are still standing because we invented PDF files.

So he said, you're beating us up about it on the consumption of energy all the time, but if it wasn't for us, there wouldn't be trees that are sucking in all that carbon. So there you touche, Touche. Like the, I think the end-to-end the impossible thing.

I'm sorry, Sean. Yeah, go ahead. No, I was just gonna say, kind of going back to what, what Kimberly was saying about end-to-end, one of the big issues with this scope three is, okay, we went through our entire process, but then you might stop at the end, but that's when the circular economy comes in and then we start talking about, okay, how are we gonna dispose of hardware effectively, you know, what's gonna happen in the wake of all of our actions at the end?

So it's, it's that whole process from beginning to end and then beyond. That's what I just wanted to point out. Sorry, go Ahead.

Yeah, I was just gonna so, so sorry Bonnie. The, uh, it's, it's interesting 'cause the, the Impossible Foods people are not too far from where I live. And when I went down to talk to the CEOA couple years ago, the whole thesis behind that company was about how inefficient the whole system is in terms of producing meat.

And they were using that actually to sell the company more so than the, the product itself, you know, saving the world and saving resources. So in a sense it's, it's, it's, it's a very, very long process that involves a lot of things that we're just not aware of. And so when, when Mike mentioned, uh, cows, what was that again?

Cows chewing grass in a away Grass fed Yeah. Way. Their stomach, they have multiple it All, it all feeds into, so to speak, um, the, the argument of, of that company at least in possible foods.

Yeah. Well, I'm gonna do what I can to control scope three emissions, my ending this conversation right here. Um, it's been, it's, it's been a heck of a, a text drug gang.

I hope you all at home have liked it. Mike, uh, John Mitchell, Kimberly Bonnie, thanks for joining in. You know what, we'll be back tomorrow to wrap up our week before a long holiday weekend here on Textron Gang.

Uh, until then, no, this is Alan Shimel and I hope you've enjoyed today's gang. I'm Bonnie Schneider, sustainability contributor to the Techron Group. I'm excited to introduce you to a groundbreaking new initiative from Textron Research, the sustainability pulse meter.

The pulse meter offers valuable insights into how environmental responsibility factors into tech purchasing decisions for key players in the industry. Position your company as a leader in the industry and differentiate from your competitors with the sustainability pulse meter offered exclusively from Techstrong research.