Energy efficiency, a key driver of Cloud Computing

During the economic slowdown, firms shifted to the 'Cloud' by considering the cost benefits involved, now with the improved market condition, energy saving is emerging as a significant factor for cloud computing adoption.

"There is a lot of work that we in the semiconductor industry do to develop solutions that makes cloud computing more energy efficient," says Paramesh Gopi, CEO and President of Applied Micro, a fabless semiconductor firm, providing energy efficient solutions. According to him, 2.2 percent of the U.S. electricity bills are accounted for by datacenters.

A study was conducted by Greenpeace on cloud computing vendor NetSuite to determine the energy savings of NetSuite's customers. By vastly reducing the need for servers and support equipment, such as server room air conditioning, Greenpeace found that the average NetSuite customer can cut its electricity bill by more than $10,000 per year. When added to the overall costs of hardware, software licenses, maintenance, personnel and occupancy, NetSuite calculates the cost reductions can exceed $100,000 per year, per customer.

The study also found that with more than 6,000 customers sharing datacenter resources, NetSuite's platform saved more than $61 million in energy bills per year. These savings amount to nearly 595 million kilowatt-hours annually, the equivalent of nearly 423,000 metric tons of carbon dioxide per year, which is the average electricity consumption of 56,000 homes per year.

In order to expand its portfolio, recently Applied Micro launched its APM801xx family of energy-efficient embedded processors with a small form factor for Power Architecture-based products. The company's India design center at Pune, which was started in 2008, also plays a crucial role in designing these products, according to the CEO. The company currently has a headcount of 100 in India with plans to ramp it up to 160 by the end of this year.