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Cloud computing could lead to billions in energy savings

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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 (s 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 (s MSFT), 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 (s AMZN). 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.

29 Responses to “Cloud computing could lead to billions in energy savings”

  1. The debate will rage on about the role cloud computing will play in the future of IT, but we can’t ignore the elephant in the room. Energy consumption is a large and looming issue in IT, and needs critical consideration in designing the datacentres of the future. Whether you believe these datacentres will be in the cloudy skies or not, businesses must take new approaches to significantly reduce the financial and environmental strain that server energy consumption is causing. read ways in which how energy can be saved

  2. It is wise to take a comprehensive look at could computing, and to compare it with other architectural options. One must examine the business and technical requirements, the architectural characteristics usage patterns of the applications and data, the non-functional requirements and service levels, and regulatory and compliance constraints among many other factors. Valid options should be considered carefully as some may yield desired benefits without cloud complications. A well-developed business case presenting the best options will help business decision-makers understand and select the best option for their company. Energy savings and carbon footprint reduction are but two of many variables.
    __Joseph Starwood

  3. Of course as points out, it may be silly to project cloud computing at 69% of IT spend by 2020, as this report does, “since the rapid technological advance of IT may mean that ‘cloud computing’ will be a quaint and old-fashioned concept by then, when technologies we haven’t anticipated will be having significant impact.” Who was discussing “cloud computing” in 2002?

  4. The problem is that cloud suppliers, with the possible exception of Google, locate their server farms where electric costs are the lowest and today that means coal fired generation. Facebook and Apple come to mind.

    Coal being the dirtiest source of power, this does not speak well for the “greenness”of the cloud

  5. Abhisek Bhowmik

    There will be some efficiency for server consolidation but that may be negated by increased network overload for I/O. Are we calculating the total greenhouse emission of hosting company, network providers, and the client business? I have a feel that cloud computing is like farming offshore and then carrying it(extra emission).. Not local farming and hence not a green process.

  6. Security and enterprise espionage and gouvernement easy way to just seize data from cloud services operators.

    Technology moving way faster than cloud services operators could ever keep up in the long run.

    Reasons why cloud computing have an audience today, while they look modern and to date, but will never become the next total solution because of the IP implications as well as the future overhaul aspect of it.

    For decades, there are talks about how slow hardware and software adoption are in corporate environment.

    Multiply this by thousand of folds and you get the slow upgrade and update pace of the cloud services operators tomorrow.

    • Cloud computing is an interesting and efficient concept , once implemented it can be improved and developed further to address other concerns and issues relating to ‘Security’,’More effecient use of energy’, ‘performance’,’reliability’!

      • It’s not that efficient. The information has to travel over a larger infrastructure, over and over, even for the youngest bit.

        Something like HDD fragmentation comes to mind, where 31bit are marked as used just for 1bit, when thinking about all that’s involved: interconnection protocols, packets, handshakes etcetera.

        And systems that giant, always require huge amount of efforts just to maintain. And let’s not forget, they have to be profitable. Meaning quality will sometimes count for less.

        Also let’s not forget about the risks involved with having global centralized systems. The power of internet stands in the fact that it’s not centralized.

        Finally, the bandwidth will became a controlling issue, possibly becoming a sort of a new coercion factor. Something like how you buy today a mobile with a heavy plan attached to it combined with bandwidth caps.

  7. Interesting discussion. I do agree that one has to be cautious when examining who carries out the study. However, let’s look at the fundamentals. As long as there is a sharing of a resource, that usage becomes more efficient, provided it isn’t overspec’d to cater for the one in a million demand peak. However, look also at the supply vs demand. Some products/services experience an increased demand which results directly from an increased supply, and cloud computing, its speed and effiencies and the communication benefits (EDI) all will lead to increased usage, which will appear to lead to a less efficient use of energy/processing power etc. In reality it will be more efficient, because, whilst using more power etc, it will be doing much, much more. The logical next question is whether or not its doing more than we need. Business in theory only does what is necessary but in practice is made up of people with ego’s and “must have” attitudes, and so we’ll have to wait for the next big recession before anyone cuts down to the necessaries again.

    In summary, if you look at pure effieicny, in terms of what goes in as against what comes out, cloud computiong has to be more efficient, but if you look at total usage of resources, there is no doubt we will use more, not less.

    And as for security, who’s kidding whom? As long as you’re connected, you’re at risk. When I look at how companies manage their security internally, I’d rather leave that to a group of professionals.

  8. rtrauben

    Regardless of all the hype, the ROI has to depend on the ratio
    of compute to I/O, the latency of communication, whether the
    code has alot of semaphores and whether those semaphores are
    remote. Cloud computing has security issues (think Murdock)
    and requires replaces locally dissapated energy with energy of transport for all I/O. Finally there is automagic resource allocation management which takes these decisions of QOS/security away from the consumer. I am sure any government regulatory
    or any corporate concern would love unintentionally outsourcing their compute to potential adversaries
    so their otherwise confidential data are cracked.

  9. Katie,

    thank you for this great article! I love the aspect that our CMS hosting partner plan not only gives SaaS providers access to a ultramodern model driven (web) content management system, but really helps to save our planet (which looks quite similar to an onion anyway).

    As is incredibly fast (see for an independent opinion, and mind that this site resides on a shared hosting platform with 45 other sites) the advantage is clear: if you run ten’s of sites on the same infrastructure you need only thenth’s of energy per site. Wow, what an awesome potential for energy conservation in IT, just work out the percentage!

    Actually I never realized this benefit myself (looks like I could not see the forest for the trees). Anyway, it is a very strong point for shared hosting infrastructures.

    Regards from Germany,

  10. Muruga

    If the cloud computing companies deploy all latest renewable energy and low emission, that could bring in some savings as monitory and environmental.

  11. Cloud hosting helps in keeping the cost down for both, the users and the website owners. The users, can easily access the files from any computer and the owners, need not to reproduce the software and ship it out. They just rent the server space.

  12. 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.

    • Bill M

      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.

    • Red:
      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

  13. 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!

  14. “…$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.

  15. 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.

  16. Mark S

    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.

    • Mark S

      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.

  17. Colin Martin

    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.

    • Shion Abdillah

      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.

  18. 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. For a good overview of cloud computing the following infographis is helpful