Cloud Computing and Sustainability: Beyond energy and into ethics

BSR recently wrote an article on the sustainability impacts of cloud computing beyond the usual topic of energy/carbon reduction that instead delves into energy policy, human rights, and data privacy.

It is interesting to note that in the context of cloud computing, human rights doesn't necessarily equate to labor practices, but rather data privacy and protection of data by cloud service providers. This, of course, is an area that Workday takes very seriously.

They end with this note, which challenges cloud providers to broaden the scope of what is typically considered corporate responsibility:

"As cloud computing takes hold and changes the profile of business, so too will it change notions of business ethics and corporate responsibility. There was once a time when business would argue that suppliers should take sole responsibility for following labor and environmental laws, yet today we see armies of auditors and labor relations specialists going above and beyond what is legally required. A similar transition will arise with cloud computing, and activities deemed outside the scope of corporate responsibility today -- challenging unreasonable law enforcement demands and meddling in energy policy -- will be mainstream tomorrow. Now is the time for today’s most innovative companies to define what that looks like in practice."

CDP Study Shows Cloud Computing Saves Green AND Is Green

The Carbon Disclosure Project recently released a study that provides some interesting numbers on the sustainability of utilizing cloud computing (both economically and environmentally). The study was conducting using 11 global firms as case studies, including two Workday customers: Aviva and Applied Materials.

Key findings:

• Cloud computing can avoid millions of metric tons of CO2
• Potential financial benefits from cloud computing run into $ billions
• Cloud computing delivers a postive net present value (NPV)
  
• Cloud computing brings business efficiency savings

To illustrate, they build a hypothetical scenario of a large global firm moving their HR application to the public cloud (e.g. Workday HCM). They found that this would save $12 million over five years and cut CO2 emissions by 30,000 metric tons - the equivalent of taking 5,900 cars off the road for a year!

The overall results show that by 2020, "large U.S. companies that use cloud computing can achieve annual energy savings of $12.3 billion and annual carbon reductions equivalent to 200 million barrels of oil – enough to power 5.7 million cars for one year."

This is great news for Workday customers and confirms what we've known for a while now: SaaS Is Green!

Study on energy and carbon savings by cloud computing

Interesting new report by Microsoft/Accenture/WSP claiming that running business applications in the cloud can help reduce energy consumption and carbon emissions by a net 30 percent or more versus running those same applications on their own infrastructure.

See their study here.

However, some voices do not fully subscribe to the benefits mentioned in the study.

It would be very interesting to conduct a similar study specifically to Workday's services and customers sustainability benefits by switching to our cloud offering.

Carbon Accounting - an opportunity for Workday?

In a recent InfoWorld article, the crucial role of IT in the solving the climate crisis is described in two dimensions:
* measuring CO2 emissions
* reducing the carbon footprint of enterprises

With a cap-and-trade agreement drawing closer and closer, the need to measure the emissions is very clear. Lots of companies will look for ways to comply to the new regulations and an assessment of their current footprint will become an immediate requirement. Several companies are starting to offer solutions already. Some might be rudimentary, but the concept is there. Note that several of these companies are already in the Workday eco-system:
* ILOG (our Flex graphics provider)
* Rackspace (our online email provider)
* Microsoft (strategic partner)

More comprehensive solutions are being worked on by interesting startups such as Greenstone.

The reduction of CO2 emissions of an enterprise can be accomplished in a wide variety of ways. The SaaS delivery model with its highly efficient hosting environments provides a good way to reduce IT-based emmissions. Workday plays a very positive role in this dimension already. Our customers can turn off their on-premise servers and rely on our data centers. Carbon offsets for our energy consumption could complete the footprint reduction for our customers.

But how about the measurement dimension? Workday already is the system of record for all accounting activity, why not carbon accounting? Could integration to upcoming hosted carbon-measurement systems make a difference? Is there a strategic opportunity for us to pursue?

The Microsoft environmental dashboard extension is an interesting data point. Warren Wilson, research director with London-based market researcher Ovum, said other major ERP vendors, including SAP and Oracle, as well as smaller players are building a range of tools to measure carbon emissions. I had a phone call with Warren about 9 months ago where was inquiring about Workday's interest in this topic. I believe our interest could be sparked by the increasing market demand.

Green Predictions 2009

InfoWorld's Ted Samson has asked 10 industry IT leaders for their predictions for 2009. Will the economic downturn kill green initiatives? Or will the energy savings drive more initiatives? What will happen in Green data centers?

My favorite was by Microsoft: "What are best practices to reduce energy and computational resource consumption for application design? Sloppy code is wasteful. Not only is it slow, error prone, and often not extensible, it usually wastes energy and utilizes unnecessary computational resources. This has a significantly negative impact on the environment. However, most architects are given the "virtualize the problem away" answer for environmental sustainability."

So let's build the most efficient apps we can and be green. :-)

Also noteworthy:
* AMD predicts the start of carbon budgets to prepare for coming regulations.
* Forrester thinks energy savings will shift from data center focus to all distributed PCs (think Energy Star 5.0)
* Cisco calls cloud computing the next green killer app and Microsoft predicts cloud providers will report environmental metrics and provide concrete green operational level agreements for enterprises

Aplicor's view on green SaaS

Chuck Schaeffer, CEO of Aplicor (another SaaS ERP provider, mainly known for CRM), has posted a good article on what makes SaaS green and what concrete steps can be taken to improve efficiency of data center operations.

http://blog.aplicor.com/071001.htm

He quotes a 2007 APC study whereby only about 30% of data ceneter energy consumption goes into servers, the rest is infrasturcutre to keep stuff running. But there are many other interesting details in his post, so go take a look.