4 reasons why cloud computing is efficient

There have been a few recent analyses showing that cloud computing has significant efficiency and cost advantages. The most recent one was conducted by Jon Taylor’s team at WSP Environment & Energy for Salesforce.com, and it showed per-transaction emissions reductions averaging 95% for companies that shift to using the cloud. Four reasons why cloud computing is significantly more energy efficient than using in-house data centers:
 
1. Economies of scale.
2. Diversity and aggregation. 
3. Flexibility.
4. Ability to sidestep organizational issues instead of having to address them head-on.

These four big energy advantages will over time translate into more and more pressure for companies to adopt cloud services, because the economic advantages (driven by the energy advantages) are so large.  And it’s not just energy costs, it’s the capital cost of all the supporting equipment, which in a standard in-house facility can be $25,000/kW and (together with the energy costs) add up to half or more of the total costs of the facility (for details see Koomey, Jonathan G., Christian Belady, Michael Patterson, Anthony Santos, and Klaus-Dieter Lange. 2009. Assessing trends over time in performance, costs, and energy use for servers. Oakland, CA: Analytics Press.  August 17.)