Adoption of the cloud as a viable IT solution has grown exponentially during the past several years. In 2010, Forrester Research found that cloud investments were valued at $40.7 billion; by the end of this year it is expected to reach $150 billion as businesses of all sizes realize its increasing viability.
The rationale for moving IT services to the cloud centers on increasing efficiency and efficacy. Some also see it as an environmentally responsible choice; they consider the cloud to be a key feature of IT environmental sustainability.
“Cloud services make a positive contribution to sustainability: The cloud encourages important clean-tech applications like smart grids and it also encourages consumers to use virtual services such as video streaming to replace resource-heavy physical products. The cloud also draws resources to where they are used most efficiently and its jobs tend to be cleaner and safer than those of more traditional industries,” explains the nonprofit association BSR.
The Carbon Disclosure Project estimated in its report “Cloud Computing: The IT Solution for the 21st Century” (2011) that 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 a year.
Additionally, Pike Research predicted in its 2011 “Cloud Computing Energy Efficiency” report that data center energy consumption will drop 31% from 2010 to 2020 as a result of increased adoption of cloud computing.
On the flip side, data centers tend to have a sizeable carbon footprint. BSR stated that the majority of the United States’ top data centers are fueled by coal: it’s inexpensive but dirty. To be environmentally sustainable, data centers need to draw their power from renewable energy sources.
Google has made significant investments in renewables and is using that energy to power 34% of its business. It recently entered into two 20-year agreements to purchase power from a wind energy developer located in Iowa and Oklahoma, two states in which Google operates large data centers. Recognizing the business opportunity presented by its impressive investment of more than $1 billion in renewable energies, Google formed Google Energy, a subsidiary that allows it to buy and resell electricity to wholesalers.
Yahoo and Facebook have made notable strides by choosing to locate to sites where they could secure large amounts of existing hydropower. Yahoo expanded its data center in Lockport, N.Y., which is drawing power from Niagara Falls; and Facebook built a 100% hydroelectric-powered operation in Lulea, Sweden, earlier this year.
It’s likely we’ll see more of these types of investments as more and more cloud services are powered by renewable energy.