Cloud Computing Adoption Will Deliver Billions In Energy Cost Savings
Cloud computing – the virtualization of computing power – is being advanced by IT suppliers such as AT&T, Microsoft and Salesforce.com as a computing service which saves costs and reduces CO2 emissions compared to dedicated computing equipment. Our recent report, conducted on behalf of the Carbon Disclosure Project, reveals that widespread adoption of cloud computing will deliver significant business and environmental benefits over the next ten years.
Looking at firms with revenues above $1bn in the US, we forecast that by 2020, 69% of spending on IT infrastructure, platforms and software will be on public and private clouds (compared to 14% today). This will result in US economy wide savings in energy worth $12.3 billion in 2020 as well as annual CO2 emission reductions of 86 million metric tons. Potential users of cloud computing have a right to be sceptical about claims of cost savings but the IT industry is fully behind this initiative.
Our independent analysis included in-depth interviews with 11 multi-nationals from a broad spectrum of industries. In calculating the CO2 reductions, we modelled the energy consumption of US data centres taking into account a range of factors including the number of servers, server utilisation rate, the embedded energy of these servers, the energy required for data transportation and data centre PUE. In converting energy consumption to CO2 emissions, we recognised that the carbon component of energy will vary depending on the energy source. As a result, we used the US average carbon factor as stated by the US Energy Information Administration.
Will benefits for individual firms vary from our generic model? Yes. Will some firms fail to optimize the potential benefits? Yes. But the shift in computing architecture is profound and the pace of innovation rapid. For example, virtually all new energy and environment apps are built on cloud platforms – linking energy efficiency in use to sustainability functionality.
- Tagged in :
- Energy Management,
- Carbon Strategy
