Andrew Winston – A leading expert on sustainable business and author of ‘Green to Gold’ and ‘Green Recovery’ gives his view on the role cloud computing can play in sustainability
business strategy. http://www.andrewwinston.com/
Cloud computing is all the rage. In its simplest terms, it means centralizing your company’s information technology (IT), from data and storage to software. All the servers and applications sit elsewhere in the Internet “cloud”, but more literally in a data center or centers. You can request these additional resources when you need them and you only pay for what you use.
This report shows that US companies are set to increase their adoption of cloud computing over the next decade from 10% to 70% of their IT spend. The predicted adoption could save 85.7 million tons of carbon in 2020, a 50% reduction versus no cloud at all. The energy savings would be more than $12 billion per year by 2020.
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. It can help companies decrease their carbon emissions, improve operational efficiency and decrease capex on IT resources.
So the move to more cloud provisioning is good news. IT is one of the fastest growing energy hogs, accounting for at least two percent of global energy use and is set to more than double over this decade (Smart 2020). In my last book, Green Recovery, I focused on IT
as one of five operational areas where green initiatives help companies save money quickly (the others were facilities, distribution, telework, and waste).
While the IT world has gotten a lot more efficient lately, there’s still much room for improvement and the results of this and other studies strongly suggest that moving some of your applications to the cloud can help immensely.
Data centers can lose up to 96% of the energy coming into the building, losing efficiency in three key areas: cooling the room, cooling the servers, and keeping servers idle (utilization rates as low as 10 to 20 percent)11
. Using the cloud
can help in all these areas. Modern data center design tackles room and server cooling and “virtualization” techniques, used at scale, can address the absurd waste, in percentage terms, from server underutilization.
In essence, large scale centers serving many clients are more efficient, especially for smaller enterprises seeking cloud support, and allow for better resource planning. But I’d offer a few points worth thinking about, and one note of caution.
1. The centralization of computing power should look familiar. I recently spoke with Mark Monroe, the new Executive Director of Green Grid, an organization dedicated to making IT more energy and carbon efficient. He compares the cloud to the electric grid, citing Nicholas Carr’s book, The Big Switch, which Monroe says “compares utility computing development to the emergence of centralized electrical generation in the early 20th century.” Like electric plants, Monroe says, central computing “utilities” benefit from scale and high utilization.
2. We are talking about “servicizing,” or turning a product into a service offering. In theory, a service provider will strive to keep its costs down, thus using as little energy and resources as possible. Cloud computing fits this model well (and fits a general transition to helping customers use less). As Monroe says, “Cloud providers want to provide an hour of CPU time, a Gigabyte-month of storage, a CRM transaction, an email, or a web page for as little cost and as high a margin as possible. That just has to lead to higher efficiency than someone focused on delivering a feature internally.”
3. But, keep one thing in mind when moving to a service based energy- using function: the footprint is still yours. Technically, a company’s main footprint includes only its own facilities (in wonky terms, that’s “Scope 1 emissions”). But I believe that anyone doing contract work for you – which is not really the same as traditional suppliers – should count toward your footprint.
In short, 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 a business’ carbon footprint and its bottom line. The sustainability agenda of many firms is increasingly seen as a core strategic priority. The adoption of cloud computing allows firms to deliver on sustainability while reducing costs. Executives should view cloud computing as a way to transition to a low carbon business model while increasing the efficiency and effectiveness of business operations.
11. Cited in The Green Recovery
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