Report from Accenture examines ways transformation might cut down energy consumption and possibly give CIOs and CTOs more to contribute to the enterprise.
Migrating to the cloud may be a way for enterprises to reduce carbon emissions and certain costs, according Accenture’s report The Green Behind the Cloud. One of the authors of the report, Peter Lacy, senior managing director, European lead and global sustainability lead with Accenture Strategy, says moving to the cloud can play a role in sustainability strategies. That may be become increasingly of interest to organizations, as the report indicates energy demand is expected to increase with more data centers planned around the world.
Lacy says cloud migration could ease that energy demand especially if organizations choose public cloud providers who are working to cut down their carbon footprints. The report posits that migrations to the public cloud might reduce global carbon emissions by as much as 59 million tons of CO2 annually. Reducing total IT emissions by 5.9% would be equivalent to removing 22 million cars from the road, according to the report.
This kind of environmental goodwill, Lacy says, may fit into a bigger strategic picture that leads to improved performance within the enterprise. Cloud migration naturally is expected to increase agility and productivity with certain cost efficiencies, but he says it can also elevate the significance of IT leadership within the organization as they help cutdown energy consumption. “There is a major role for CIOs and CTOs to play in a very concrete and tangible way,” Lacy says, “even beyond what they may have done before in terms of energy efficiency and data centers.”
Energy efficiency with an enterprise may go hand in hand with other organizational traits, according to the report. Accenture’s research from 2013 to 2019 found that companies that consistently earned high marks on environmental, social, and governance performance also saw operating margins 4.7x higher than organizations with lower performance in those areas. There were also indications of higher annual returns to shareholders among those environmentally minded enterprises.
In addition to the potential benefit cloud migration presents for the environment, Accenture’s report shows there can be total cost of ownership savings of up to 30-40% when organizations migrate to more cost-efficient public clouds. The report also shed light on how cloud migration affected Accenture’s expenses. The firm runs 95% of its applications in the cloud, the report says. After its third year of migration, Accenture saw $14.5 million in benefits, plus another $3 million in annualized costs saved by right sizing its service consumption.
Moving to the cloud might not mean much in terms of cutting energy consumption if the service provider does not take steps to be more energy efficient. The report includes case studies of major cloud providers Google Cloud Platform, Amazon Web Services, and Microsoft Azure, giving some perspective on their individual energy efficiency efforts.
For example, the report outlines that Google uses a carbon-intelligent platform to schedule non-urgent data center workloads to run when there is an abundance of energy from low-carbon sources. AWS’ infrastructure is described in the report as 3.6 times more energy efficient than median domestic enterprise data centers. Microsoft has been carbon neutral since 2012, according to the report, and by 2025 the company expects its data centers will draw 100% from renewable energy through power purchase agreements.
Lacy says there is a competitive landscape among providers in terms of energy consumption plans. He says Google is committed to 100% renewable energy and wants to achieve a carbon footprint of zero from the cloud. Though Amazon offers greater energy efficiency compared with enterprise data centers, Lacy says there is room to further their efforts. “Amazon is probably the furthest behind at the moment, at least on that basic level of use of renewable energy,” he says. The gaps between major providers may narrow overtime, Lacy says, as they each move closer to a zero-carbon footprint.
The escalation of the global IT ecosystem continues to grow faster than other business segments, such as logistics, given the ongoing development of technology such as AI, edge computing, and 5G, Lacy says. Finding ways to embrace cloud migration while also reducing energy consumption might become central to IT leadership plans. “The CIO/CTO is going to have an even greater role and responsibility at a time when we’re seeing more regulatory environments and more aggressive voluntary moves toward the UN’s global energy goals,” Lacy says. “CIOs and CTOs will have more opportunities to step up and be counted on this as part of the corporate effort.”
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Joao-Pierre S. Ruth has spent his career immersed in business and technology journalism first covering local industries in New Jersey, later as the New York editor for Xconomy delving into the city’s tech startup community, and then as a freelancer for such outlets as … View Full Bio