In the technology e-commerce industry, Amazon and eBay are the two largest players, where Amazon has a market capitalization (cap) of nearly $87 Billion and eBay has a market cap of about $42 Billion (in 2012). One of the challenges such businesses face is the means to make a direct connection between what customers do on their website and the associated cost of providing commerce services to them. This month, eBay launched the Digital Service Efficiency (DSE) dashboard and metric system that helps the company track the technical infrastructure performance, consumption of resources, and users’ experience on eBay.com across four key business priorities: performance, cost, environmental impact, and revenue.
Users on eBay sell or buy; some visit the site, either looking for information or may become prospective customers. The newly developed metrics give eBay visibility to what users actually...use.
Having the simplified metric system developed and the ability to measure constantly are key, providing performance visibility and enabling effective fine-tuning. DSE is public and available online (see dse.ebay.com). The 2012 measures established a baseline, driving eBay's productivity and efficiency goals for 2013, as follows:
- Increase transactions per kWh by 10% year over year
- Reduce cost per transaction by 10% year over year
- Reduce carbon output per transaction by 10% year over year
The DSE system is based on The Green Grid’s Association metric systems of power (PUE), water (WUE) and carbon (CUE) and by incorporating learnings from The Green Grid’s Data Center Maturity Model into their implementation. The meters are divided into INFRASTRUCTURE and BUSINESS.
- Consumption indicators: Power used in MW (mega watts); Carbon levels (overall); and Number of users. For example, the number of users in 2012 was 112.3 millions worldwide.
- Data center performance effectiveness: Power; Water, and Carbon are measured based on The Green Grid’s Power Usage Effectiveness (PUE™) metric. PUE measures how effectively the data center infrastructure powers and cools the servers, networks, and storage systems that deliver IT services. Similarly, the Green Grid Association developed standards corresponding to water - Water Usage Effectiveness (WUE™) and carbon – The Carbon Usage Effectiveness (CUE™).
- Energy supplied - Clean energy utilization versus grid-supplied electricity.
The Business metrics include:
Revenue, Cost and Carbon, with a breakdown of Revue per transaction, Cost per transaction, and Carbon per transaction across users, servers, and MW consumption.
In the DSE solution brief (click to download), eBay lists the following:
- PERFORMANCE: transactions per kWh, transactions per user, transactions per server
- COST: dollars per kWh, dollars per transaction, dollars per user, dollars per server
- ENVIRONMENTAL IMPACT: metric tons of carbon dioxide (CO2) per kWh, tons of CO2 per transaction
- REVENUE: revenue per transaction, revenue per kWh, revenue per user
(Refer to the DSE Solution Brief for more details).
The dashboard also displays separately the total 'sell' and total 'buy' transactions, as well as total transactions, per kWh.
What has eBay done so far to address the 2013 goals?
Changes in the data center infrastructure focused on cooling projects and high performance servers, as well as increasing the renewable energy sources generation by adding more solar to the energy mix and utilizing Bloom Energy technologies.
On the hardware and software sides, decisions are made in collaboration with the software developers to achieve performance optimization. Other areas of focus include reduction of the cost of servers, optimizing deployment of servers and racks, and efforts to cut down the power consumption. At the same time, optimize the system software utilities, operating system performance, and the various applications. The teams also use tools that improve software application performance. For example, by adjusting the memory used in an application you can reduce server utilization (and save money, save energy and reduce CO2), but also free up memory for other application processing.
Another aspect is employees accountability against every metric they own, as it enables everyone to be involved a shared goal. The DSE enables employees to fine tune their particular area of work to contribute toward reaching the set goals. Once the complex process of setting the metrics was completed, internal clear and on-going communication is as important.
Throughout 2012, eBay’s cost was rising due to the increase in volume of the business and the company’s growth. Will users sell or buy homes on eBay, too? Yes, there is an active Real Estate store.
Look at eBay Inc. Social Innovation programs and initiative: http://www.ebayinc.com/social_innovation
And the Green Team: http://www.ebayinc.com/page/ebay_green_team