Cloud means billions in energy savings, research says

By 2020, large companies in the U.S. could save up to $12.3 billion annually in energy costs by investing in cloud computing, according to research firm Verdantix.

“Take the example of a global food and beverage firm with revenues of $10 billion which transitioned its HR application to a public cloud. This firm could reduce CO2 emissions by 30,000 metric tons over five years,” said Stuart Neumann of Verdantix in a press release. “Financial benefits from more efficient use of IT hardware, reduced energy consumption from data cent[res] and a reduced support team mean firms can achieve a payback in under a year.”

Verdantix expects companies with revenues of $1 billion or more to spend 69 percent of their infrastructure, platform and software budgets on cloud services by 2020. It believes this will result in CO2 emissions reductions of 85.7 million tons each year.

According to the research, the Department of Energy believes data centers now make up three percent of total energy consumption in the U.S. – double what it was in 2000.

Companies interviewed for the research listed security concerns, service reliability, vendor lock-in, and a lack of complete understanding of the cost savings as their top barriers to cloud adoption.

To complete its report, Verdantix examined 11 firms that have been using the cloud for at least two years.

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