The market for cloud computing services has expanded quickly during the past few years, offering a compelling alternative to traditional data center operations, but up to this point relatively little of the industry emphasis has been on the potential for energy savings. According to a new report from Pike Research, the energy efficiency benefits of cloud computing are substantial, and growth in the market will have important implications for both energy consumption and greenhouse gas (GHG) emissions. The cleantech market intelligence firm forecasts that the adoption of cloud computing will lead to a 38% reduction in worldwide data center energy expenditures by 2020, compared to a business as usual (BAU) scenario for data center capacity growth.

“The growth of cloud computing will have a very significant positive effect on data center energy consumption,” says senior analyst Eric Woods. “Few, if any, clean technologies have the capability to reduce energy expenditures and GHG production with so little business disruption. Software as a service, infrastructure as a service, and platform as a service are all inherently more efficient models than conventional alternatives, and their adoption will be one of the largest contributing factors to the greening of enterprise IT.”

As part of its cloud computing adoption scenario, Pike Research forecasts that data centers will consume 139.8 terawatt hours (TWh) of electricity in 2020, a reduction of 31% from 201.8 TWh in 2010. This also represents a significant decrease from the 226.4 TWh that would be consumed by data centers in the firm’s BAU scenario. The reduction will drive total data center energy expenditures down from $23.3 billion in 2010 to $16.0 billion in 2020, as well as causing a 28% reduction in GHG emissions from 2010 levels.

Pike Research’s report, “Cloud Computing Energy Efficiency”, provides an in-depth analysis of the energy efficiency benefits of cloud computing, including an assessment of the software as a service (SaaS), platform as a service (PaaS), and infrastructure as a service (IaaS) markets. The study examines the key demand drivers and technical developments related to cloud computing, in addition to detailed profiles of key industry players. Market forecasts include a quantification of energy savings and GHG reduction opportunities under a cloud computing adoption scenario, with a forecast period extending through 2020. An Executive Summary of the report is available for free download on the firm’s website.