A report, created by research firm Verdantix and sponsored by AT&T, estimates that cloud computing could enable companies to save $12.3 billion off their energy bills. That translates into carbon emission savings of 85.7 million metric tons per year by 2020.


Another study out this week has found that if companies adopt cloud computing, they can reduce the energy consumption of their IT and save money on energy bills. The report, created by research firm Verdantix and sponsored by AT&T, estimates that cloud computing could enable companies to save $12.3 billion off their energy bills. That translates into carbon emission savings of 85.7 million metric tons per year by 2020.

The Verdantix report isn’t the first one to deliver such a finding. Last year Pike Research found that cloud computing could lead to a 38 percent reduction in worldwide data center energy use by 2020, compared to what the growth of data center energy consumption would be without cloud computing. Another study from Microsoft, Accenture and WSP Environment and Energy last year found that moving business applications to the cloud could cut the associated per-user carbon footprint by 30 percent for large, already-efficient companies and as much as 90 percent for the smallest and least efficient businesses.

All of that is good news. Cloud computing is one of the most disruptive Internet infrastructure shifts to happen in recent years. Web companies have been embracing cloud computing in order to buy flexible, lower cost, on-demand computing power from companies like Amazon. And these cloud computing services generally replace the computing that would have been done by companies’ own in-house computing resources.

However, it’s always good to take these studies with a grain of salt. There’s a reason AT&T and Microsoft are looking into the energy efficiency of cloud computing: they sell cloud computing services.

Other studies have also found that cloud computing isn’t always the most energy efficient computing option, and in certain instances the cloud can be more energy intensive than traditional in-office computing. A report from University of Melbourne researcher Rod Tucker and his team, which I wrote about for GigaOM Pro (subscription required), found that cloud computing can indeed save energy when it leads simply to the consolidation of servers, but looking at three different applications of cloud computing — storage, software and processing —  energy efficiency savings are negated in some scenarios.

For example, one such instance when the cloud isn’t more efficient, according to Tucker’s research, is when companies are using cloud computing for storing data. Tucker found that when the number of downloaded and accessed files becomes larger (more than one download per hour for a public cloud storage service), those energy efficiency gains are erased.

There’s enough research out there by now that shows that cloud computing is overall more energy efficient than traditional in-house computing. Which is great news for Internet companies and cloud computing providers. The growing energy consumption of the Internet, data centers and our always-on connected devices will only continue to grow, so efficiency trends will only to continue to become important.

Image courtesy of The Planet.

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  1. A good example of this, the hybrid device called the ClearBOX. Pushes most functionality into the cloud and consolidates necessary on-premise hardware to one device.


  2. Steven Appenzeller Thursday, July 21, 2011

    While it’s important to look at the amount of energy utilized in running the cloud, let’s not forget an important point: that cloud resources can locate near large pools of renewable, clean power such as hydro or solar. The EPA has a great site that lets you view the green power sources available in each state. http://www.epa.gov/greenpower/pubs/gplocator.htm For a good overview of cloud computing the following infographis is helpful http://www.profitperspectives.com/2011/03/cloud-visualized.html

  3. The carbon emissions reduction is only achieved if the cloud data center is efficient and/or using renewable clean energy. Otherwise you are just shifting it from one organization to another. While this may be beneficial from a carbon accounting perspective, it is not achieving the desired end result. On the efficiency aspect, while most data centers that measure efficiency use PUE/DCiE today, they are very simplistic, the more interesting metrics going forward are CADE and DCeP. This will help to address the issue of business value vs. cost of storage etc.

    1. I fully agree. Unless the source of energy production was clean then it is simply classed as redistribution. Let’s celebrate when we are using wind turbined powered data centres to power our cloud comupting solutions. Until then I think we should all stop waving the green flags to the masses as it is probably just as CO2 intensive as using your office server room I imagine.

  4. Nice post about cloud

  5. project Collaboration Thursday, July 21, 2011

    The real benefit of the cloud is seamless collaboration. Everything else is gravy!

    1. Sorry, I talk to hundreds of IT execs intrested in cloud. Sure we can offer a “seamless” collaboration platform but it’s kind of like leading a horse to water… Today, it’s about automating what we already know. I’d argue transfering the business process is more difficult than the technology. Really, pre-provisioned hardware, virtualization, a service catalog, a portal and a good dose of business process. What’s new except the business is now prepared to consume a standard, repeatable platform offering. How novel. Sorry, got the scars.

  6. OK. So I buy the overall concept that Cloud can be much more efficient from an energy perspective and is definitely a driver for businesses. However, I also believe the energy efficiency is a must have due to the speed and growth that Cloud promises. Quite simply the old model will not be efficient enough to maintain profitability margins. Will it save money, on a per node base sure but when the scale is 5 or 6x of what is in the data center today , I’d say we end up spending more money and consuming more power. Kind of like how virtualization was going to help. Did for a while but then became a mechanism for hypergrowth. This has the potential to be ultra-uber-Hypergrowth.

  7. Yes that is true, Rather than using an in-house solution, people actually share the servers without compromising on performance, and it helps a lot to reduce global carbon footprint.

  8. “…$12.3 billion off their energy bills…” that translate to $12.3 billion company have to pay to the cloud company. Also “…carbon emission savings of 85.7 million metric tons”…it’s a not a saving, it’s a transfer of 85.7 million metric tons of carbon emission to the cloud computing campanies.

  9. Mani Periasamy Thursday, July 21, 2011

    With multi-tenancy in place, the “whole” has to be less than the sum of “parts”. Agree with the author there will be substantial energy savings with an efficient data center i addition to scores of other benefits for small and medium business. This is our goal at iBE and we are working towards it!

  10. The cloud – ridiculous. why would everyone want to put their sensitive data somewhere so insecure? hey everyone lets put all of EVERYONE’S eggs in one basket.

    1. Not quite a valid argument there Red. The basket happens to be a heavily guarded, multi-redundant, massively backed up, and constantly monitored ‘basket’. One that is far more secure than any datacenter that most companies can afford to manage and keep secure on their own.

    2. Joseph Starwood Red Thursday, July 28, 2011

      Your concern for security and privacy is valid and important. It is the implementation that is in question. Are you really sure your in-house data is secure?
      I’ve been a business and IT consultant for 20+ years. In that time, I’ve seen employees share passwords, give their usernames and passwords to strangers over the phone, send confidential data in the clear, open holes in the firewall, write applications that grant non-employees unfettered access to the entire enterprise data repository, and design delegated administration functions requiring delivery of the LDAP administrative credentials (The Golden Keys) into the hands of non-employees.
      Have you conducted a complete security audit and penetration test using a reputable security firm? You might be surprised at what you find.
      Best Wishes.
      __ joseph Starwood

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