Cloud computing can help companies realize $12.3 billion in energy savings

July 27, 2011 — 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—a study by the Carbon Disclosure Project (CDP), found. The study reinforces past findings that companies that adopt cloud computing can reduce their energy consumption, lower their carbon emissions, and decrease their capital expenditure on information technology (IT) resources while improving operational efficiency.

The study, “Cloud Computing: The IT Solution for the 21st Century”, was conducted by independent analyst research firm Verdantix and sponsored by AT&T. For the study, Verdantix conducted in-depth interviews with multinational 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 to 50 percent.

In addition to a predicted aggregate, annual carbon reduction of 85.7 million metric tons by large U.S. companies, the study further found that 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; and
• Improve automation that helps drive process efficiencies.

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

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