For businesses, going green would usually mean buying energy-efficient equipment or a hybrid or electric vehicle fleet and a reduced use of resources like paper. However, businesses can also reduce their carbon footprint by moving operations to the cloud. Using cloud computing tools in lieu of maintaining on-premise equipment can help enterprises reduce their carbon footprint and save on power costs.

A lifecycle analysis done by Accenture (news, site) and WSP indicates that enterprises who run Microsoft (newssite) cloud services like Exchange Online, SharePoint Online and Dynamics CRM Online stand to gain in terms of cost-savings from reduced energy use. Meanwhile, firms can reduce their carbon emissions by at least 30% per user by going to the cloud.

Efficiencies of Scale

According to the Microsoft-commissioned whitepaper, enterprises stand to gain with efficiencies of scale when it comes to on-site provisioning of equipment. This means that bigger enterprises generally have more efficient utilization of resources than smaller businesses. However, in terms of cloud computing, small businesses benefit the most, as there is only need to pay for services and resources rendered, rather than the entire infrastructure. The cost-savings can reach up to 90% for small enterprises that bring their business to the cloud.

Cloud computing service providers focus their operational expenses on IT at a higher level than a business with a dedicated IT department. Because of a sharing of infrastructure, cloud providers can achieve better economies of scale, particularly as their client base grows. Efficiency expert Jonathan Koomey stresses that economic factors are pushing businesses toward cloud computing. “One of the major reasons is the more efficient use of power by cloud computing providers,” he said at a datacenter industry event earlier this year.

Environmental Advantages

The analysis echoes this sentiment. “This circumstance leads to an increased focus on cost and efficiency improvement, driving optimization of data center and application performance beyond what many businesses can achieve on their own.”

The study cites four areas where cloud computing can be environmentally-beneficial and viable. With dynamic provisioning, cloud providers are able to allocate resources depending on capacity and availability. Multi-tenacity means cloud providers can service multiple clients and users on shared server infrastructure. Improved utilization means cloud providers are at 40% to 70% resource utilization, rather than an on-premise average utilization rate of 5% to 10%. Meanwhile, datacenter efficiency translates to more datacenter power, going to the hardware rather than elsewhere.

A Call for More Environmentally-Friendly Cloud Computing

While the study focused on Microsoft products, the same concept can extend to other cloud providers as well. As firms start to move their operations and processes to the cloud, their own carbon footprints will be reduced.

However, as more and more enterprises adopt cloud computing services, energy use by cloud providers will also increase. Greenpeace projects a 9% increase in energy use by cloud providers per year through 2020 (PDF download). This means that providers of enterprise cloud services should find greener sources of energy, rather than rely on current technologies that might still involve large carbon footprints, such as burning coal or other fossil fuels.

Still, the net effect will likely be positive, as cloud computing lets businesses consolidate their processing requirements under a shared facility. Big or small, businesses will benefit from more efficient resource utilization, as well as goodwill brought about by a more environmentally-viable way of running their business.