How Green Is My Cloud? Tech Companies, Cloud Computing and Energy Use

This started as a weak signal. But the heavens are starting to rumble thunderously.

The questions about the energy usage required to power cloud computing were initially considered by many the concern of an obsessed minority. Their worries were sublimated by fascination with the technological potential, the financial opportunity and the strategic implications for corporate competition.

But this is becoming a mainstream concern. Executives take pains to address it even when not asked. Press releases emerge. Articles are written. Analysts assess the countervailing claims.

The reason, as so often happens with environmental and sustainability issues in business, has less to do with what is right and more to do with what is efficient. There are two primary impacts: one is cost-related. Energy use reduces margins, which reduces free cash flow and affects however one measures profit. Which, in turn, impacts stock price performance, compensation and executive longevity. Talk about hitting someone where it hurts...

The second set of issues has to do with brand and reputation. Most tech companies, more than other corporations, like to be thought of as clean. That is usually how their founders were brought up and how their education and their peer-group have inclined them. It is also how many of their customers and, increasingly, investors like to be perceived. So in the global battle for pre-eminence in the tech sphere, every new issue is an opportunity and a threat. The opportunity is to convince others that what you are doing is smart AND good. The threat is that something bad will happen, you will be blamed, your brand sullied, your honor besmirched. Which might also affect stock price and those related factors.

Instinct and self-interest will prevail. The companies are playing catch-up because this was not top-of-mind when the trend broke. But they get the message. And they know that if they falter, plenty of observers will feel free to announce it to the world. JL

Roddy Scheer and Doug Moss comment in Scientific American:

Why is Greenpeace upset with some leading tech companies for so-called “dirty cloud computing? Leading tech companies like Google, Apple and Microsoft are now offering unprecedented amounts of data storage and access to apps on huge Internet-connected servers, saving consumers and businesses the hassle of installing and running programs and storing information on their own local computers.

Cloud computing means that these providers have had to scale up their power consumption considerably, as they are increasingly responsible for providing more and more of the computing horsepower required by the world’s two billion Internet users. No doubt, sharing such resources on centralized servers is more efficient than every individual and business running their own versions separately. In fact, the research firm Verdantix estimates that companies off-loading data and services to cloud servers could save $12 billion off their energy bills and reduce greenhouse gas emissions by 85 million metric tons within the next decade. But for the greenhouse gas savings to be realized, the companies offering cloud computing services need to make the right energy choices.

Greenpeace has been tracking sustainability among tech companies for over a decade, and recently released a report, “How Green is Your Cloud?” assessing the green footprint of the move to cloud computing. According to the analysis, some of the major players (Google, Facebook and Yahoo) have gone to great lengths to ensure that significant amounts of the power they need come from clean, green sources like wind and solar. But Greenpeace chastises others (Apple, Amazon and Microsoft) for relying on so-called “dirtier” sources of power, such as coal and nuclear, to run their huge data centers.

“When people around the world share their music or photos on the cloud, they want to know that the cloud is powered by clean, safe energy,” says Gary Cook, a Senior Policy Analyst with Greenpeace. “Yet highly innovative and profitable companies like Apple, Amazon and Microsoft are building data centers powered by coal and acting like their customers won’t know or won't care. They’re wrong.”

Greenpeace’s report evaluates 14 major tech firms and the electricity supply chains in use across more than 80 different data centers that power cloud-based services. Some of the largest data centers are in buildings so big they are visible from space and use as much power as 250,000 European homes. If the cloud were its own country, says Greenpeace, it would rank 5th in the world in electricity consumption.

“Companies like Google, Yahoo and Facebook are beginning to lead the sector down a clean energy pathway through innovations in energy efficiency, prioritizing renewable energy access when siting their data centers, and demanding better energy options from utilities and government decision-makers,” reports Greenpeace. But unfortunately the majority of the industry is not marching in step. As such, Greenpeace is calling on all tech companies with cloud services to develop siting policies based on access to clean energy sources, invest in or directly purchase renewable energy, be transparent about their energy usage, share innovative solutions so the sector as a whole can improve, and demand that governments and utilities increase the percentage of clean, green power available on the grid.