Verdantix Cloud Computing Report For Carbon Disclosure Project Forecasts $12.3 Billion Financial Savings For US Firms

New York, USA. July 20, 2011. Large US firms can achieve annual energy savings of $12.3 billion by 2020 by moving IT infrastructure to the cloud. This is according to a new Carbon Disclosure Project study sponsored by AT&T and produced by independent analyst firm Verdantix. The report “Cloud Computing: The IT Solution for the 21st Century” forecasts that by 2020, US firms with revenues greater than $1 billion will accelerate investment on public and private cloud services to 69 percent of infrastructure, platform and software budgets. This can deliver cumulative CO2 emissions reductions of 85.7 million tonnes each year, the equivalent of nearly 200 million barrels of oil.

“By transitioning some IT applications to the cloud, large firms can achieve substantial financial benefits and add impetus to corporate sustainability commitments to cut back on CO2 emissions” said Stuart Neumann, the Verdantix senior manager who led the research. “Take the example of a global food & beverage firm with revenues of $10 billion which transitioned its HR application to a public cloud. This firm could reduce CO2 emissions by 30,000 metric tons over five years. Financial benefits from more efficient use of IT hardware, reduced energy consumption from data centres and a reduced support team mean firms can achieve a payback in under a year.”

“A large percentage of global GDP is reliant on ICT – this is a critical issue as we strive to decouple economic growth from emissions growth” commented Paul Dickinson, Executive Chairman of CDP. “The carbon emissions reducing potential of cloud computing is a thrilling breakthrough, allowing companies to maximize performance, drive down costs, reduce inefficiency and minimize energy use – and therefore carbon emissions – all at the same time.”

The analysis is based on detailed case study evidence from interviews with 11 global firms that have been using cloud computing for at least two years. The Verdantix analyst team applied an innovation diffusion algorithm to forecast cloud services adoption by 1,833 global firms in the US with annual revenues greater than $1 billion. Key findings contained in the report “Cloud Computing: The IT Solution for the 21st Century” are that cloud services adoption can:

Generate financial benefits of $12.3 billion. US businesses with annual revenues of over $1 billion can achieve annual energy savings of $12.3 billion in the next 10 years if they adopt cloud services in line with the Verdantix analysis. The model forecasts that the financial benefits from energy reduction and increased IT efficiency in 2011 alone would reach $824 million by year end.

Cut 85.7 million metric tonnes of CO2 per year by 2020. Firms in the US could achieve cumulative cuts of nearly 85.7 million tonnes of CO2 emissions each year by 2020. This is based on the forecast that US firms with revenues greater than $1 billion plan to spend 69 percent of infrastructure, platform and software budgets on cloud services by 2020. Nearly 5.7 million tonnes would be cut in 2011.

“Our forecasts for US economy-wide carbon reductions and financial benefits depend on overcoming some key barriers” commented Janet Lin, Verdantix Senior Manager in the New York office. “Concerns about data security and service reliability are rife so firms must articulate a strong business case. Calculating the subscription costs of cloud computing is easy. But how can IT directors compare this to the cost of existing operations? They must analyse costs across the IT estate, including support staff, electricity and supporting infrastructure to make a financial case for cloud computing.”

About Verdantix
Verdantix is the fastest-growing, independent analyst firm focused on energy, environment and sustainability. Through our global primary research and deep domain expertise we provide our clients with strategic advice, revenue generating services, best practice frameworks, industry connections and competitive advantage. For more information visit: www.verdantix.com.

About the Carbon Disclosure Project (CDP)
CDP is an independent not-for-profit organization holding the largest database of primary corporate climate change information in the world. Some 3,000 organizations and cities across the world’s largest economies now measure and disclose their greenhouse gas emissions and climate change strategies through CDP, in order that they can set reduction targets and make performance improvements. This data is made available for integration into local government, business and policy decision making. For more information visit www.cdproject.net.

Press Contact
Elinor Newman-Beckett, press@verdantix.com
+44(0)203 371 6792

Wednesday, 20 July 2011