Cloud computing holds the key to cutting carbon emissions

20 Jul 2011

Cloud computing is being lauded for its environmental and financial benefits in a new study released by the Carbon Disclosure Project (CDP) today, which predicts that companies that embrace cloud computing can realise US$12.3bn in energy savings and 85.7m metric tonnes of CO2 savings annually by 2020.

The CDP study, Cloud Computing – The IT Solution for the 21st Century, which was carried out by the analyst research firm Verdantix, looks at how ICT is a key area firms are now looking at to help them achieve low-carbon business models.

With the Department of Energy indicating that data centres may be consuming 3pc of total US electricity today, the report predicts that companies are planning to accelerate their adoption of cloud computing from 10pc to 69pc of their IT spend by 2020.

Case study evidence was compiled from 11 large global firms that have been using cloud computing for at least two years, including Aviva, Boeing, Citigroup and Juniper Networks.

This information was used to build a forecast model to assess the financial and sustainability benefits for a company that is opting for cloud computing services, such as infrastructure-as-a-service, software-as-a-service and platform-as-a-service.

The CDP says many of the firms interviewed cited cost savings as a primary motivator for opting for the cloud, with anticipated cost reductions as high as 40–50pc.

It predicts that large US firms that use cloud computing can achieve annual energy savings of US$12.3bn and annual carbon reductions that are equivalent to 200m barrels of oil, which would be enough to power 5.7m cars for one year.

“Finding providers and partners that can take some of your energy-using operations to scale, and manage them in a shared capacity, is good for both business’ carbon footprint and its bottom line,” said the sustainability business expert Andrew Winston, who is also the author of Green Recovery and Green to Gold, in a statement released by the CDP today.

CDP report on cloud computing

According to the CDP, this table shows that the annual net financial benefits associated with the energy saving from cloud computing are forecast to reach US$824m by 2011, rising to US$12.3bn by 2020 for the 2,653 global firms with annual revenues in the US above US$1bn. Image courtesy of CDP

Thrilling breakthrough

CDP executive chairman Paul Dickinson points to the ICT sector’s role in helping to drive sustainability.

“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. The carbon emissions-reducing potential of cloud computing is a thrilling breakthrough, allowing companies to maximise performance, drive down costs, reduce inefficiency and minimise energy use – and therefore carbon emissions – all at the same time.”

In the report, the CDP offers advice for companies that wish to invest in cloud computing, suggesting they develop an enterprise-wide strategy and that they understand the costs of supporting the different elements of the existing IT model.

Photo: Image courtesy of CDP

Carmel Doyle was a long-time reporter with Silicon Republic