Cloud computing saves energy and money

20th July 2011

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Using virtual IT infrastructure can help organisations to save costs, improve operational efficiency and cut carbon, according to new research from the Carbon Disclosure Project (CDP).

After studying 11 multinational companies’ use of cloud computing (using multiple server computers via a digital network), the research predicts the energy savings associated with the technology could cut carbon emissions from large US organisations by 85.7 million tonnes every year and reduce costs by $12.3 billion by 2020.

Research firm Verdantix conducted interviews with senior IT managers from companies including Aviva, Boeing, Citigroup and Dell, as well as providers of cloud services. Verdantix then used modelling methods established by the Global e-Sustainability Initiative to create two future scenarios for a hypothetical company based on the information it gathered.

According to its calculations a food and drink firm, with annual revenues of $10 billion, could reduce its CO2 emissions by 25,000 tonnes in five years by moving its human resources applications from a dedicated IT set up to a private cloud. The research also suggests that such a project could achieve payback within two years.

Juergen Basse-Welke, Novartis’s lead architect infrastructure, confirmed: “With an internal private cloud, we expect to reduce costs in terms of total cost of ownership by 40-50%. 10-15% of that saving will come from better usage of hardware and the rest from improved operations basically introducing a self-provisioning portal that requires minimal human intervention.”

While interviewees cited reduced costs as the key driver for moving to cloud computing, many executives are coming to view cloud computing as a way to switch to a low-carbon business model, says to the report.

Data centres are believed to consume up to 3% of total US electricity, with up to 96% of that energy lost through cooling server rooms and keeping servers on while they are not in use. Cloud computing offers organisations a single way to tackle these issues.

Commenting in the report, sustainable business author Andrew Winston said: “IT is one of the fastest growing energy hogs, accounting for at least 2% of global energy use and is set to more than double over this decade.

“With analysis like this showing dramatic energy reductions, I am optimistic about the role that the cloud can play in a low carbon economy – it makes business and environmental sense ... the move to more cloud provisioning is good news.”

CDP executive chair Paul Dickinson described the emissions reduction potential of cloud computing as a “thrilling breakthrough”.

“A large percentage of global GDP is reliant on ICT,” he said. “This is a critical issue as we strive to decouple economic growth from emissions growth.

“The communications economy of the 21st century has the potential to generate more economic value with less environmental impact, and ICT companies will lead the way.”

To read the report in full visit the CDP website.


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