12 Apr Does every cloud have a greener lining? Get the lowdown on adoption and sustainability.
Co-authored with James Paek, Microsoft Alliance Director at Eighty20 Solutions
There are a whole raft of energy saving impacts for organisations to enjoy when they migrate their data centres from on–prem to cloud. But are these sustainability benefits all they’re cracked up to be? It’s worth exploring just how ‘green’ your cloud operation is before celebrating it as part of your sustainability credentials.
The rush to the cloud as replacement for on–prem server storage has been driven by many factors. The three Cs – cost, competitiveness and COVID – are probably the biggest triggers for organisations making the move to cloud hosting for their data and universal applications. But there is another very important C to consider and that’s climate change. There can be no doubt that the cloud is a less carbon intensive solution for powering our increasingly digital economy.
At the top of the agenda
While the green credentials of the cloud may have been a ‘nice to have’ in the past, they’re becoming a far more important consideration at the leadership table. According to Gartner, by 2025, 75% of CTOs will be tasked with contributing to enterprise sustainability goals and some will have it included in their KPIs.
Cloud transformation may not be the only tool in the IT box for tightening their belt on energy consumption, but for now it’s the biggest lever they’ve got to show they’re pulling their weight as a good corporate citizen. And the C-suite sustainability agenda isn’t just about doing the right thing, it’s about delivering on important strategic goals that will enable companies to be more competitive, profitable and resilient.
Research from multiple sources indicates that sustainability front runners have a lower cost-of-capital, deliver superior equity market returns, get easier access to new markets by creating new types of products and services, and/or are better at managing risk and ensuring more resilient operations.
Sustainability: Good for Business, An Executive Playbook, 2021 and beyond
Microsoft and EY
With these important outcomes in mind, it makes perfect sense for sustainability to be right up there on the executive agenda. But there’s also pressure coming from customers – at the consumer and business level – and shareholders for organisations to commit to sustainability and show they are working on emissions reduction. Listed companies are now required to make sustainability disclosures to the ASX and organisations must demonstrate compliance on sustainability to be eligible for many government procurement opportunities. Consumers are voting with their feet too, with 50% of respondents in EY’s FutureConsumerNow survey in July 2020 saying they intend to make climate change and sustainability a top priority in shaping their consumption.
A cast iron case for energy efficiency
So just how much of a difference can the cloud make when it comes to reducing an organisation’s environmental footprint? As a major leader in cloud solutions, Microsoft have been exploring the energy saving benefits of the cloud for well over a decade. Their 2010 report Cloud Computing and Sustainability: The Environmental Benefits of Moving to the Cloud was updated in 2020, with the help of WSP, a global consultancy with expertise in environmental and sustainability issues. They used advanced modelling to measure the environmental impacts of Microsoft Cloud Services relative to on-premises infrastructure and solutions.
The findings are an open and shut case for choosing the cloud for improving energy savings and emissions reduction. When comparing operation of four applications – Microsoft Azure Compute and Storage, Exchange and Sharepoint – Microsoft Cloud is between 22 and 93% more energy efficient than traditional enterprise datacentres. These energy savings come from key efficiency improvements across IT operations and equipment, and data infrastructure. But the report also shows that, despite these energy savings, cloud datacentres are still chewing through a massive 70 billion kilowatt-hours (kWh) of electricity each year in the US alone. That’s roughly 1.8% of the total electricity consumed in the country.
This is why Microsoft, along with other cloud providers are on a mission to eliminate negative environmental impacts coming from their cloud infrastructure. They’ve already boosted the carbon efficiency of their cloud services to between 72 and 98% by taking up renewable energy sources. And, like other cloud providers, they’re on a mission to take their environmental credentials to the highest level, targeting 100% use of renewable electricity by 2025 and becoming carbon positive by 2030.
We will shift to a 100 percent supply of renewable energy by 2025, and take action to remove more carbon than we emit by 2030—the same year by which we will reduce our carbon emissions more than 50 percent and electrify our fleet of global campus vehicles. By 2050, we will remove our historic carbon footprint.
The carbon benefits of cloud computing: A study on the Microsoft Cloud in partnership with WSP, 2020
Helping cloud customers walk the talk
Getting their own house in order for sustainability is just one part of what Microsoft are doing to support better carbon emissions performance for customers. By providing customers with the tools to track the impact of their actual cloud usage, they’re going one step further and enabling them to report in detail on the carbon footprint of their IT operations. This can provide visibility to all stakeholders as well as important compliance metrics for B2B customers and mandatory reporting.
Like pretty much everything else about the cloud, this feature turns an organisation’s IT infrastructure from a mysterious black box into a flexible, transparent set of apps, tools and services. Producing this type of data from an on-prem system would be either cost-prohibitive or impossible to deliver.
With their own Emissions Impact Dashboard for customers, Microsoft are delivering carbon accounting across all three scopes of emission generated by usage of Azure, Dynamics and, most recently, MS365. For the time being, they’re claiming to be the only cloud provider to provide this level of transparency to customers. No doubt Google and AWS aren’t far behind in releasing an equivalent reporting dashboard for emissions associated with cloud usage. But this best practice approach to monitoring emissions across their own value chain is now being rolled out to their customer as Microsoft Cloud for Sustainability. It’s a powerful SaaS solution enabling organisations to capture, report and review data on carbon emissions wherever they occur in their operation and value chain.
Holding strategy and execution to account
When it comes to making good on their commitment to sustainability, Microsoft are empowering customers to get a grip on their entire carbon footprint so they can be as efficient as possible in minimising it. While this is certainly a worthy thing to be doing for the environment, it makes sense for their business too. As we highlighted at the beginning of this article, organisations today have a lot to gain from making their sustainability achievements tangible and visible. Providing them with tools and services to do this is another way that Microsoft are securing customer relationships by meeting their needs.
While some Australian organisations are primed for this focus on sustainability as part of their cloud transformation, others have yet to make it a pillar of their business case and strategy. At Eighty20, we’ve only recently seen sustainability joining cost, security and business agility as key drivers of our clients’ cloud journeys. But just like any other goal, once we include it at the strategic level, we make it part of the discovery, planning, design and adoption phases, measuring and reporting so that each client’s cloud model, framework and performance can keep delivering better outcomes.
With sustainability embedded in digital transformation strategy, and with monitoring and reporting made easier with state of the art solutions from Microsoft, getting real on sustainability can support all sorts of organisational goals – from shaping employer brand to meeting compliance obligations. Instead of being a box to tick or part of a mission statement that sounds sincere, sustainability becomes a fully-fledged performance criteria that’s measured and managed.