We already know that cloud computing can be more energy efficient in many cases, but how much energy can it save (and in what cases)? Google writes in a blog post that a company can see energy savings of 65 to 85 percent from moving their internal hosted IT services — from email to documents to spreadsheets — over to Google Apps.
The idea is that organizations that host their own IT services commonly have more servers than they need that are often times running inefficiently. But Google, on the other hand, has streamlined its servers and data centers to run as efficiently as possible and small companies can tap into this. Because efficiency is at the heart of cutting costs for Google, it’s been willing to invest in this type of infrastructure that many small organizations can’t afford or don’t have time or interest in maintaining.
The Carbon Disclosure Project found that companies with over $ 1 billion in revenues in the U.S. and Europe could save billions of dollars, 
and reduce substantial carbon emissions, by 2020 if they moved their internally-hosted IT services to the cloud. WSP Environment & Energy conducted research for Salesforce.com that found that for companies that shift to using the cloud, there’s a per-transaction emissions reductions averaging 95 percent.
Researcher Jonathan Koomey pointed out in a post last year that cloud computing is more efficient in at least four ways:
- Economies of scale. It’s cheaper for bigger cloud computing folks to make efficiency improvements because they can spread the costs over a larger server base and can afford to have more dedicated folks focused on efficiency improvements.
- Diversity and aggregation. More users, more diverse users, and more users in different places means computing loads are spread over the day, allowing for increased equipment utilization.
- Flexibility. Cloud installations use virtualization and other techniques to separate the software from the characteristics of physical servers (some call this “abstraction of physical from virtual layers”).
- Ability to sidestep organizational issues instead of having to address them head-on (which is hard and slow). While most company in-house IT operations face the problem of a disconnect between IT departments driving server purchases, and facilities departments paying the electric bill, that problem has largely been solved for the cloud providers. They generally have one data center budget and clear responsibilities assigned to one person with decision making authority.
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