With every new generation of networking equipment we develop, Cisco is challenged to increase product performance while reducing power consumption. Cisco engineering teams work to improve the energy efficiency of our products and implement strategies that help extend the life of our hardware products.

During FY2006, we established an internal cross-functional working group to focus on design for energy efficiency covering:

• Energy efficient product design
• Industry standards and metrics that allow customers to select more energy efficient equipment
• Energy efficient data center design

Starting with our products, we are considering energy efficiency in all aspects of product design, such as:

• Efficient power supplies to minimize energy losses while assuring reliability
• Intelligent power distribution systems to improve efficiency
• Standard-voltage line cards that eliminate the need for multiple electrical conversions
• Cooling fans to function with temperature-specific speed controls

Energy Efficiency Standards

Several international industry and government organizations are creating energy-specific efficiency regulations and guidelines to be used in the development of electronics products. Cisco leaders believe our customers will continue to require more efficient products. They need information that can help them compare different products and make informed choices. At Cisco, we continue to work on the development of metrics that our customers can use to evaluate the energy efficiency of a range of networking equipment.

During FY2006, Cisco participated in several programs:

• U.S. EPA Eco Forum, focusing on the development of metrics for energy efficiency in networking equipment and data centers
• Japan's Ministry of Economy, Trade, and Industry Router and Switch Technology Committee, developing energy efficiency standards for networking equipment
• European Union Broadband Communication Code of Conduct working group, driving energy efficient design for network appliances at home and in small and medium-sized businesses
• California Energy Commission Appliance Regulations, requiring external power supplies to meet Energy Star standards for energy efficiency

External Power Supplies

The U.S. Environmental Protection Agency calculates that the average American home has 5 to 10 external power supplies powering devices in their homes. Its research has also found an average of 30 to 50 percent of the electricity input to these devices is wasted through inefficiencies in the power supplies and given off as heat.

The California Energy Commission has targeted these inefficiencies through its Appliance Efficiency Regulations, which uses aggressive standards derived from the EPA's Energy Star standards for single-voltage external power supplies.

Cisco has set a goal of meeting the Commission's and Energy Star standards for external power supplies by July 1, 2007 for all of our products worldwide.