Posted by Rob Bernard
Chief Environmental Strategist

As the head of environmental sustainability at Microsoft, I lead a team that thinks about issues around energy use and the implications that a move to the cloud will have on both worldwide energy use and carbon emissions.  Some of the questions that we are looking at include: what is the benefit of consolidating IT services in the cloud?  Would those cloud-based services consume more or less energy than they do on-premise?  And would carbon emissions output from the IT industry, which is currently on par with the airline industry, go up or down?   We decided to jumpstart this discussion with a new study that can help us and the market better understand the true costs and efficiencies of moving more services to the cloud.

To get a better sense of the energy and carbon emissions differences between on-premise and hosted services, our partners Accenture and WSP Energy & Environment compared three commonly-used business applications: Microsoft Exchange, SharePoint and our Microsoft Dynamics CRM products.  They looked at cloud deployment of these services versus on-premise deployments for small (100 users), medium (1,000 users) and large (10,000 users) companies. They found that when organizations move these services to a hosted Microsoft cloud, they are able to reduce the energy use and carbon footprint per user by at least 30% for large organizations, and in the case of small business, this result was even more dramatic, with potential savings of up to 90%. 

To better understand the reasons for the carbon-reduction capabilities of cloud computing, you have to look closely at several key IT-based drivers from the study.  These drivers include:

  • Dynamic provisioning of servers or the ability for servers to efficiently move workloads when demand is high;
  • Multi-tenancy or the housing of several companies workloads on the same servers. Think of this like sharing servers with other companies in a secure and private way, but using the same energy to power multiple companies versus one company requiring many servers;
  • Server utilization, which increases the portion of a server's capacity that an application actively uses, thereby performing higher workloads with a smaller infrastructure footprint;
  • Power Utilization Effectiveness (PUE), which is a calculation for datacenters which considers the overall efficiency of a datacenter. For instance, how much energy is going to the machine to do computing tasks vs. the amount needed for heating, air conditioning and other building services).

At Government Leaders Forum today in London, Steve Ballmer offered a useful analogy for how cloud computing can improve customer efficiency. He stated: 

"Think of this like public transportation where the energy savings for moving thousands of people around on shared infrastructure instead of single occupancy vehicles has a significant environmental impact.  The same is true with cloud computing."

These findings do rely on one important assumption, namely, for customers to realize these carbon emissions reductions, they must decommission the existing IT infrastructure that was running those on-site applications.  This is an important issue that must not be overlooked.

As companies continue to find ways to achieve their corporate sustainability goals, of which IT is often a small but important part, these findings start to provide some clarity about the cloud's potential to offer an order-of-magnitude improvement in the energy efficiency and carbon emissions of IT.   It's also important to remember that while this paper looks at the impact of IT under current conditions, as the cloud evolves, it will continue to enable new kinds of applications to help eliminate carbon emissions.

I encourage you to download the new study to learn more about how Microsoft's cloud applications can help your organization reduce carbon emissions; it is available here.