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Cloud Could Cut Electricity Bill By £1.2bn

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Cloud can reduce emissions and energy consumption across the IT estate by 50 percent

Migrating to the cloud could save UK companies up to £1.2 billion a year in energy costs and reduce their emissions by the equivalent of over 4 million passenger vehicles by 2020, according to research by the Carbon Disclosure Project (CDP).

By shifting 68 percent of infrastructure, platform and software budgets to cloud services, the research study found that UK companies can cut emissions by 9.2 million metric tons annually in less than 10 years, while decreasing capital expenditure on IT resources and improving operational efficiency.

A thrilling breakthrough

“A large percentage of global GDP is reliant on ICT. This is a critical issue as we strive to decouple economic growth from emissions growth,” said Paul Dickinson, executive chairman of CDP. “The carbon emissions-reducing potential of cloud computing is a thrilling breakthrough, allowing companies to maximise performance, drive down costs, reduce inefficiency and minimise energy use – and therefore carbon emissions – all at the same time. However, full transparency from providers on energy consumption and mix is an important step in providing further insight to users into CO2 reductions achieved.”

France, for instance, generates more than 75 percent of its electricity from nuclear and a further 13 percent from renewable, while in the UK, only 23 percent of electricity is generated from low carbon sources.

It is believed that data centres could already be responsible for up to 3 percent of total electricity consumption in the UK, according to the Parliamentary Office of Science and Technology.

The report identifies several other benefits of adopting cloud, apart from the prediction of reducing annual carbon output. UK companies using cloud computing can avoid costly up-front capital investments in infrastructure, improve automation , and save on the continual maintenance of excess capacity while having the flexibility of being able pay for it when needed.

Another important benefit of adopting cloud is the improved time-to-market, where a new server can be created or brought online in minutes, according to the research report. Citigroup’s Paul Stemmler comments “Carbon reduction is one driver, but not the primary driver. The primary driver is time to market.  Developers used to take 45 days to get new servers, but in the internal cloud infrastructure that we operate in our own private network, it takes just a couple of minutes.”

The research, conducted by analyst firm Verdantix, follows on from the June study, “Cloud Computing: The IT Solution for the 21st Century”, but focuses exclusively on UK and French markets.

“To calculate the carbon reductions from cloud computing, our model took a number of parameters into account, including the size of the firm, number of servers and data centre power usage effectiveness resulting in the compelling potential energy cost savings” commented Stuart Neumann, Senior Manager at Verdantix. “The economic model for the UK is based on financial data for 457 firms in the UK with revenues greater than £623 million.”

The research was based on interviews with multi-national firms 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.