Amid the COVID-19 pandemic, more companies are accelerating digital transformations, including fast-tracking their move to the cloud. Company leaders are recognizing that cloud has quickly become the foundation that’s required to enable rapid scalability and reliability and to fuel new sources of innovation and growth. With access to the cloud comes agility and flexibility, both of which are imperative to meet changing consumer and market demands.
At the same time, companies are facing increasing pressure to solve large socioeconomic challenges and operate as responsible businesses. CIOs are uniquely positioned to guide their companies to make the right technology decisions that will accelerate progress in this shift to more responsible and sustainable practices.
I recently explored how CIOs can take a leading role in creating new business value in the circular economy. We’re now finding that sustainable cloud migration is another way that companies can significantly reduce global carbon (CO2) emissions and meet climate change commitments. 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.
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. 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. Our 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.
3 factors to consider
Moving to the cloud can be a transformative shift, so CIOs need to begin by taking an end-to-end look at their company’s individual cloud journey. It 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, CIOs can help directly determine the sustainability and financial benefits their companies achieve from cloud migration:
- The cloud provider selected. The first step begins with 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.
- 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.
- 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.
In this era of increasing focus on sustainability, it is imperative that IT leaders act quickly and purposefully to implement solutions like sustainable cloud that not only will alleviate pressures to meet increasing expectations for responsible business practices but also will enable new sources of innovation and growth. CIOs need to act now to help their companies transform with sustainable cloud quickly and thoughtfully.