Does the Cloud Really Save You Money in Utilities?

Does the cloud save you money?It’s true that cloud computing can save your small or medium-sized business money in reduced energy usage – and I’ll break that down for you in the next section of this post – but what many people don’t know is that using cloud resources saves energy for everyone. You read that right. Double whammy. Moving your computing resources and data to the cloud helps you save money on your utility bill and helps the environment.

How the Cloud Lowers Your Utility Bill

In-house systems require continual and consistent power. Here’s a typical breakdown:

  1. A single server typically requires 3-4 amps
  2. A UPS (uninterrupted power supply) typically requires 1 amp
  3. An external backup device typically requires ~1 amp
  4. Air conditioning typically requires 15-20 amps depending on the model

What does this all mean? It means you would typically need to dedicate two 20 or 30 amp circuits just to run the equipment.

Because these systems run 24/7/365 and air-conditioning should run at all times and on weekends, the energy savings would be noticeable. I can’t give an actual dollar amount because there are so many variables, but it would really add up for a year. Especially if you have your own building, you would see a lot of direct savings.

A Simple Calculation

Here is a very generalized calculation to give you an idea of cost savings.

Let’s say your equipment uses that full 26 amps and the circuit is on a 120 VAC line. That would equal 3120 watts, or 3.12 kW. The average cost per kW-hour in the Dallas area is around 8 cents. Knowing you have to run the equipment 24x7, here is the calculation for a 4-week month:

3.12 kW x 24 hr/day x 7 day/wk x 4 wk = 2097 kW-hours

2097 kW-hours x 8¢ / kW-hour = $167.76

There are so many variables, it’s impossible to say that is 100% accurate for you. The cost will be different depending on your equipment, the amount of equipment, if you share the utility cost with other tenants in the building, and of course the always-changing cost per kW-hour that the utility companies charge. But you get the idea. IT systems in your office cost you money in electricity.

Savings Grow Over Time

That big savings also grows over time. As your company grows it also grows its IT infrastructure.

Over a 5-10 year span of consistent company growth, your energy savings in the cloud would be significant. You would also save on any maintenance required for the energy in the form of electricians, power outages, etc.

IMPORTANT NOTE: In the last section, we used a very small example to give an idea of cost savings. For larger companies with more equipment, the savings can quickly reach thousands of dollars. We have many clients with entire rooms full of racks of computer equipment, running hundreds of servers, storage, devices, etc. For those companies, the savings can be a material impact to their P&L, not to mention the ability to use that expensive square footage for more productive purposes.

How the Cloud is More Environmentally-Friendly Than Onsite Computing Resources

A recent report from Berkeley Lab, funded by Google, discovered that moving companies’ software to the cloud could save enough energy every year to power L.A. for a year. That’s pretty astounding, if you ask me.

Even with the massive datacenters required to run it, the cloud is a lot greener than you would think. Dedicated cloud datacenters are more efficient and have lower carbon emissions than the IT infrastructure used by most companies.

In fact, Fluid’s own datacenters are LEED Gold and 2 Green Globes-rated for environmental consciousness.

Save Money, Save the Earth

There are many, many reasons to move your business to the cloud. Cost savings is a big one – but environmental consciousness is certainly one to consider as well.

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