Saving Money on Energy by Going on the Cloud

Saving Money on Energy by Going on the Cloud

You’ve often heard of the expression, “It’s all about the money, honey.” Ultimately, that’s what most businesses are about. And this relates to environmental consciousness as well. Show a business that it can save money by being environmentally friendly, and you will have a much higher chance of getting buy-in than if you just spout the altruistic effects of such efforts.

Now, saving money is one of the big draws of going on the cloud (How Cloud Computing Can Save You Money ). Even in areas where you won’t usually expect cloud computing to save you dollars, it can make a significant contribution (Saving Money on Rent by Going on the Cloud ). Today, I am going to write about how cloud computing can potentially reduce your energy bills.

A recent report by research firm Verdantix and sponsored by AT&T, titled “Cloud Computing: The IT Solution for the 21st Century,” estimates that cloud computing could enable large US companies, those with more than  $1 billion in annual revenues, 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.

While this report makes an argument for cloud computing’s environment-friendliness, there are contrary opinions as well. I had written about both these views in two earlier articles (How Green Is Cloud Computing?  and Environmental Challenges to Cloud Computing ). The thing worth exploring is whether cloud computing actually reduces energy consumption, or merely transfers it to another area.

For research on the study, Verdantix conducted interviews with several big names across industries, including insurance company Aviva, aerospace firm Boeing, financial services behemoth Citigroup and IT firm Juniper Networks. As per the projected savings, the report expressed the belief that this will happen by 2020 when large companies spend 69% of their IT budgets on cloud services, up from around 10% currently.

While these figures sound impressive, they come qualified by the fact that AT&T has its own reason for promoting cloud computing – it sells the technology. I had earlier written about a contrary opinion on this subject; here’s another.

A report by University of Melbourne researchers Rod Tucker and Jayant Baliga, published in the Proceedings of the IEEE in October last year, found some possible drawbacks to cloud computing as far as energy consumption is concerned. They found that studies supporting cloud computing’s environment-friendliness usually focus on the storage aspects and not on data transfers.

The most important conclusion in our analysis is that, when comparing the energy consumption of cloud-based services with that of a typical desktop PC, we must include the energy consumption required to transport the data from the user into the cloud resources and back,” Tucker was quoted as saying.

This is particularly important if the cloud service is provided via the public Internet. Some papers that have claimed that cloud computing provides a “greener” alternative to current desktop computing fail to include the energy consumption involved with transporting the data from the user into the cloud. In many cases, we may find that the data center used by the cloud-based services is located in another city, state or even country,” he added.

So, is cloud computing environmentally-friendly or not? Can it actually save money in energy costs? If so, how much money can be thus saved? Personally, I believe that this issue needs to be studied in much greater detail, by several impartial parties, before definitive answers are obtained. The jury is still out on this one.

By Sourya Biswas


Sourya Biswas is a former risk analyst who has worked with several financial organizations of international repute, besides being a freelance journalist with several articles published online. After 6 years of work, he has decided to pursue further studies at the University of Notre Dame, where he has completed his MBA. He holds a Bachelors in Engineering from the Indian Institute of Information Technology. He is also a member of high-IQ organizations Mensa and Triple Nine Society and has been a prolific writer to CloudTweaks over the years...

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