Cloud To Reduce Data Centre Energy Costs by 38 Percent

A clean technology market research firm has made a bold prediction that cloud computing may help data centres reduce their energy expenditure by as much as 38 percent by 2020.

So says Pike Research in a new report, that the energy efficiency benefits of cloud computing are substantial, and growth in the market will have important implications for both energy consumption and greenhouse gas (GHG) emissions.

The firm forecasts that the adoption of cloud computing will lead to a 38 percent reduction in worldwide data centre energy expenditures by 2020, compared with a business as usual (BAU) scenario for data centre capacity growth.

Lower Emissions

“The growth of cloud computing will have a very significant positive effect on data centre energy consumption,” said Pike Research senior analyst Eric Woods, in a statement. “Few, if any, clean technologies have the capability to reduce energy expenditures and GHG production with so little business disruption. Software as a service, infrastructure as a service and platform as a service are all inherently more efficient models than conventional alternatives, and their adoption will be one of the largest contributing factors to the greening of enterprise IT.”

As part of its cloud computing adoption scenario, Pike Research projects that data centres will consume 139.8 terawatt hours (TWh) of electricity in 2020, a reduction of 31 percent from 201.8 TWh in 2010. This also represents a significant decrease from the 226.4 TWh that would be consumed by data centres in the firm’s BAU scenario.

Billions In Cost Savings

The reduction will drive total data centre energy expenditures down from $23.3 billion (£14.7 billion) in 2010 to $16 billion (£10 billion) in 2020, as well as cause a 28 percent reduction in GHG emissions from 2010 levels, the firm’s report said.

Pike Research’s report, “Cloud Computing Energy Efficiency,” offers an analysis of the energy efficiency benefits of cloud computing, including an assessment of the software-as-a-service (SAAS), platform-as-a-service (PAAS) and infrastructure-as-a-service (IAAS) markets. The study examines the key demand drivers and technical developments related to cloud computing, in addition to detailed profiles of key industry players.

Market forecasts include a quantification of energy savings and GHG reduction opportunities under a cloud computing adoption scenario, with a forecast period extending through 2020.

An Executive Summary of the report is available for free download here.