Whether you’re a startup or have been in business for a while, there’s no question that the past year has had a big impact on the way we all work. The COVID-19 pandemic accelerated digital transformation across the board; most leaders view the cloud as the essential foundation for rapid scalability and reliability, and to fuel new sources of innovation and growth. Access to the cloud brings agility and flexibility, both of which are imperative to meet constantly changing consumer and market demands.
At the same time, companies are facing increasing pressure to solve large socioeconomic challenges and operate as responsible businesses. The good news is green cloud allows companies to achieve innovation and growth through responsible and sustainable practices. With examples like clean energy transitions enabled by cloud-based geographic analyses and material waste reductions from better data insights, cloud migrations will continue to unlock new opportunities for companies to achieve sustainability benefits.
A new Accenture analysis shows that, with the appropriate sustainability approach, public cloud migrations can reduce global CO2 emissions by 59 million tons per year, which represents a 5.9% reduction in total IT emissions. This magnitude of reduction equates to taking 22 million cars off the road—you can imagine it will go a long way in meeting climate change commitments, especially for data intensive businesses.
Moreover, in addition to the significant environmental impact, the benefits of greater workload flexibility, better server utilization rates, and more energy-efficient infrastructure makes moving to the cloud more cost efficient than maintaining enterprise-owned data centers. Accenture analysis shows that companies are realizing up to 30-40% total cost of ownership savings from public cloud, looking holistically at server compute, network and IT labor costs.
Three factors to consider
Moving to the cloud can be a transformative shift, so business leaders need to begin by taking a thorough look at their company’s individual cloud journey. Migration requires careful analysis, planning, and execution to ensure that the cloud strategy is designed to reflect a company’s business requirements and help enable the business strategy. By considering the following three key factors, organizations can determine the sustainability and financial benefits they achieve from cloud migration:
1. The cloud provider selected. Start by selecting a carbon-thoughtful provider. Cloud operators set different sustainability commitments that determine how they plan, build, power, and retire their data centers. Differences arise from varying ranges of corporate investments in renewable energy generation, the reusability and recyclability of data center hardware, and advanced analytics for better management of asset operations. And cloud customer-facing services like transparent real-time reporting of associated carbon emissions can help track actuals against sustainability goals.
2. The ambition level for cloud optimization. There are three ambition levels in the journey toward a sustainable cloud—strategic migrations without major redesign, application of sustainable software engineering practices, and application optimization for the “fabric of the cloud.” Our analysis shows initial cloud migrations alone can reduce carbon emissions by more than 84% compared with conventional infrastructure. Reductions can be pushed even higher—up to 98%—by designing applications specifically for the cloud.
3. The level of cloud-enabled sustainability innovations. Leading companies are pushing further when it comes to innovation; going beyond data center carbon improvements. Cloud providers have unique scale and financial incentives and can work closely with stakeholders in adopting the circular economy when it comes to hardware. Our estimates show enterprise technology manufacturers can capture an additional 16% of operating profit by designing products for longevity, modularity, and circularity.
Technology, combined with our human ingenuity, presents tremendous opportunity to benefit everyone if we let it. In this era of stakeholder capitalism, leaders must act quickly and purposefully to implement solutions like green cloud to simultaneously achieve growth, sustainability—and shared success for all.
Bob Lax is a Managing Director and Cloud First Lead – US South, with Accenture. He also lectures at Georgia Tech as co-professor for the Sustainable Business Practicum in the Ray C. Anderson Center for Sustainable Business in the Scheller College of Business.