Cloud computing, where software is delivered as a service to end users over the internet, is currently receiving a lot of attention. The term describes data-processing operations that are outsourced to server farms, instead of being powered on-site. These range from websites and remotely hosted networks, to digital storage space and individual documents.

Such are the developments, that software delivered over the web looks very similar to software operating on a personal computer, and is accessible from any computer in the world. Consequently, some IT sector analysts are predicting the death of the personal computer while others believe it will simply become another device to access the on-line world. Increasingly, the engine of the IT sector is composed of large-scale data servers that are driving the cloud-computing revolution forward. With regard to energy, cloud computing should result in lower costs for users and fewer greenhouse gas emissions by streamlining information-crunching into single facilities on speedy machines.

Slashing Costs

The cloud certainly seems to offer significant cost savings. A recent study found that if companies adopt cloud computing, they can reduce the energy consumption of their IT departments and save money on energy bills.

Indeed, a report that tracks climate change information, commissioned by the non-profit Carbon Disclosure Project, carried out by research firm Verdantix and sponsored by AT&T, estimated that cloud computing could help large companies in the US save US$12.3 billion on energy costs while cutting carbon emissions by 85.7 million tonnes annually by 2020.

In 2010 Pike Research found that cloud computing could lead to a 38% reduction in worldwide data-centre energy use by 2020, compared with the projected growth of data-centre energy consumption without cloud computing developments.

However, there are a few studies which are a little less enthusiastic, including a recent University of Melbourne report that found cloud computing can save energy when it leads to the consolidation of servers. But, the study further finds that energy efficiency savings are sometimes negated, particularly when companies are using cloud computing for storing data and the number of downloaded and accessed files is larger.

Emissions Savings

The impact of the cloud on CO2 emissions is also potentially huge. A 2010 study from Microsoft, Accenture and WSP Environment and Energy found that moving business applications to the cloud could cut the associated per-user carbon footprint by 30 percent for large, already-efficient companies and as much as 90 percent for the smallest and least efficient businesses. Backing up this take on the situation is another recent study showing that customers of fast-growing cloud computing giant Salesforce’s services produced 95 percent less carbon, on average, compared with running equivalent software in application servers located on the premises.

The tech industry is convinced both that cloud computing is the future and that it’ll have a major positive impact on the environment.

‘With Salesforce’s multi-tenant model, organisations that value sustainability can give their users powerful enterprise apps without the high cost, complexity and CO<sub>2</sub> emissions associated with on-premise systems or false clouds that still require companies to buy hardware and install software,’ said Marc Benioff, Salesforce’s chairman and CEO. ‘The Salesforce community saved an estimated 170,900 tonnes of carbon in 2010 - the equivalent of taking 37,000 cars off the road, or avoiding the consumption of 19.5 million gallons (74 million litres) of gas [petroleum].’

Some of the reasons for such savings are obvious. With its on-demand model, cloud computing eliminates the need to keep data centres up and running 24 hours a day, seven days a week, thereby reducing electricity consumption. This translates to significant reductions in carbon dioxide emissions.

Energy Efficiency

While the debate over exactly how big an energy saving impact the cloud will have is on-going, there is no doubt that investment in the cloud is growing fast with the big four — Facebook, Google, Amazon and Apple — leading the way.

That said, the energy required to power data centres is enormous, and rising fast. In recent years, increased digital communication, record keeping and financial transactions have been pushing up demand for data processing and storage.

The US government itself more than quadrupled the number of data centres it operated between 1998 and 2010, growing from 432 facilities to more than 2000. Indeed, environmental campaigners Greenpeace estimate that cloud computing worldwide demanded 662 TWh of electricity in 2007, more than the power consumed by India or Germany.

As a result, there is a growing move to make data centres more efficient. In this respect the cloud has certain advantages over on-site servers as these must be equipped for peak data usage — heavy hits on a retail website during a new product launch, for example. The rest of the time on that site, web traffic plateaus and the built-in capacity of the servers goes to waste. Open data centres, on the other hand, can redistribute that excess capacity to other clients, using already highly efficient servers.

Earlier this year, Hewlett-Packard released its design of a modular data centre that it called the world’s most efficient. Google has made the same claim of its centres over the years. And Facebook recently launched the Open Compute Project, a collaborative effort to boost data centre efficiency.

Environmentally Friendly?

But while efficiency is improving, a recent Greenpeace report says this is overlooking a major variable: the energy source. Companies are relying on healthy efficiency ratings, the report says, to ‘communicate externally that their data centres are "green" and sustainable without accounting for the full environmental picture’. Though internal efficiency is a worthy goal, the report says, energy savings are superficial if the data centre is powered with a non-renewable source.

According to this report, titled: How dirty is your data? A look at the energy choices that power cloud computing, the data centres that power cloud computing account for about 2 percent of global energy demand and are growing their energy consumption at a rate of about 12 percent per year. What’s more damning, says Greenpeace, is that most of the energy consumed (50-80 percent) comes from coal and nuclear energy rather than renewable sources.

Greenpeace analysed the cloud performance of 10 leading tech companies: Apple, Facebook, IBM, Amazon, Google, Microsoft, Twitter, Yahoo!, HP and Akamai. Of these, Apple scored the lowest while Akamai and Yahoo! were ranked as the most environment-friendly, or, rather, the least environment-damaging.