The Information and Communications Technology (ICT) sector is predicted to have an 8.7% share of the global GDP by 20201 and will play an increasingly significant role in the way people live, work, play and learn. Innovations within the ICT sector will lead to increases in efficiency and productivity while enhancing the quality of life, stimulating emerging economies and spurring global economic growth. As global population grows, however, reaching nearly 8 billion by 20202, the quality and availability of natural resources will decline while costs for those resources will significantly rise. The ICT sector and the computing industry in particular have the potential to address large-scale global environmental issues, such as climate change, by applying innovative developments to traditional business strategies. Microsoft Corporation is one such company in the ICT sector supporting the transition to a low-carbon economy through its products and services.
MICROSOFT’S INNOVATIVE PRODUCT DISTRIBUTION STRATEGY
In 2006, e-commerce product sales in the United States increased by 29% to $146.4 billion. Americans purchased $17.2 billion worth of computer hardware and software products online in 2006, which represents about 10% of the U.S. market.3 As one step toward meeting the increasing demand for online products, Microsoft announced plans in January 2007, to make its popular Office 2007 product suite available for digital download via its online store, MS Office Online4. “Microsoft is committed to making it very easy for customers to purchase and download its software,” said Joe Peterson, Corporate Vice President of the Market Expansion Platform Group at Microsoft Corp. Through electronic software distribution, “we can offer our customers ondemand access to our most popular products in a fast and easy way.”
Although roughly 80% of 2007 Microsoft Office sales depend on the traditional retail distribution strategy -- a full packaged product (a DVD, plastic and cardboard packaging and related print material) sold through traditional
retail stores -- Microsoft is systematically identifying additional benefits of online sales and digital delivery.
Following a successful pilot program where customers could download a trial version of Office 2007, Microsoft commissioned a comparative carbon footprint study to quantify the new strategy’s carbon emissions savings. Findings from the study demonstrate significant environmental benefits by providing software to customers through digital download. These environmental benefits, coupled with reduced costs and added convenience for both provider and customer are increasingly driving the rapid transition to online sales and digital delivery.
MS OFFICE 2007 DISTRIBUTION CARBON FOOTPRINT STUDY
The Office 2007 comparative carbon footprint study conducted by WSP Environment and Energy found that digital delivery reduced total tonnes of carbon emissions by 88%. Framed another way, digital delivery of Office 2007 is eight times more carbon efficient than producing and shipping a DVD and its associated packaging through traditional retail distribution channels. As depicted in Figure 1, the elimination of transportation and packaging provides the greatest opportunity for carbon emissions reduction. Full package product materialsrelated emissions were the largest contributor until customer transportation (to and from the retail store) was included in the model. Customer transport was, in this study, included because the objective of the study was to compare two different methods of distribution and assess their full carbon impacts.