Tuesday, July 26, 2011

New study: Cloud computing can dramatically reduce energy costs and carbon emissions

By 2020, large U.S. companies that use cloud computing can achieve annual energy savings of $12.3 billion and annual carbon reductions equivalent to 200 million barrels of oil – enough to power 5.7 million cars for one year.

This is according to a new study by the Carbon Disclosure Project (CDP), “Cloud Computing: The IT Solution for the 21st Century,” conducted by independent analyst research firm Verdantix and sponsored by AT&T.

According to the study, companies plan to accelerate their adoption of cloud computing from 10 percent to 69 percent of their information technology spend by 2020.

The report finds that a company that adopts cloud computing can reduce its energy consumption, lower its carbon emissions and decrease its capital expenditure on IT resources while improving operational efficiency.

Stuart Neumann, Senior Manager at Verdantix, commented: “The study also analyzed the business impacts of transferring an essential business application—human resources— to the cloud and shows such an investment could give a payback in under one year.”

In addition to a predicted aggregate, annual carbon reduction of 85.7 million metric tons by large U.S. companies, cloud computing can:
  • Help users avoid costly up-front capital investments in infrastructure
  • Improve time-to-market as a new server can be created or brought online in minutes
  • Provide greater flexibility as clouds allow firms to pay for excess capacity only when they need it
  • Avoid the continual maintenance of excess capacity needed to handle spikes
  • Improve automation that helps drive process efficiencies.

... Paul Stemmler from Citigroup commented: “Carbon reduction is one driver, but not the primary driver. The primary driver is time to market. Developers used to take 45 days to get new servers, but in the internal cloud infrastructure that we operate in our own private network, it takes just a couple of minutes.”

Verdantix conducted in-depth interviews with multi-national firms—including Aviva, Boeing, Citigroup and Juniper Networks— in diverse sectors. All study participants had adopted cloud services for at least two years. Many of the firms interviewed reported cost savings as a primary motivator, with anticipated cost reductions as high as 40 – 50 percent.

Paul Dickinson, Executive Chairman of CDP, welcomed the ICT sector’s leadership in driving 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.....”  This study follows the release of a recent paper, “Building a 21st Century Communications Economy.” Tying these studies together, Dickinson commented: “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.”

The Carbon Disclosure Project (CDP) www.cdproject.net.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, so that that they can set reduction targets and make performance improvements.

Press release dated July 20, 2011

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