Press Release

Sydney, Australia, June 28, 2011 View All Press Releases

Gartner Says Location Is Critical For the Sustainable Future of Outsourced Data Storage and Cloud Services

Australia Too Carbon-Intensive, While New Zealand Seen As Green

 Cloud computing services are touted as 'greener' than owning and running in-house technology infrastructure, but geographic location is the key to more sustainable outsourced data storage and services, according to a report from Gartner, Inc.

Data center operational costs are continuing to rise, with Gartner estimating that up to 50 percent of operating costs are associated with heating and cooling. As a result, energy consumption, efficiency, monitoring and management will be a dominant trend in data center operations over the next five years. Recent Gartner research points to substantial (greater than 30 percent) potential savings in operating costs relating to electricity usage when efficiency design principles are incorporated, as well as lower upfront capital costs.

“Truly sustainable computing needs to combine energy-efficient technologies and the use of reliably available low-emission electricity, which may prompt significant changes to the geolocation of data storage and other services in the long term,” said Marcus Blosch, research vice president at Gartner. “Just as labor arbitrage has driven some aspects of business process outsourcing activities, emissions arbitrage will play an increasingly significant role for outsourced IT storage and services.”

According to Gartner, Australia’s high carbon intensive energy generation is far from conducive to the development of a long-term green IT services sector. Around 92 percent of Australia’s energy is sourced from fossil fuels. New Zealand is comparatively green, classed as a low-emission intensity country. The development of IT storage and services in New Zealand, leveraging the vast and established renewable energy sources such as geothermal, wind, tidal and hydro power, could provide the basis for a substantial content-based economic model.

“We anticipate that the parallel growth in sustainable service differentiation and the risks associated with future costs on emission-intensive electricity, will result in growth in globally distributed IT services in geographies that can boast an established blend of electricity generation dominated by low-emission sources,” said Dr. Blosch. “Vendors and end users will likely remove risk from some of the activities by moving away from established markets in emission-intensive geographies.

“Given some concerns relating to data latency in some low-emission countries, it might be possible to leverage these countries into a network of IT service regions. Data storage and services from a low-emission hub could support the assessment of cloud services from adjacent high-emission intensity areas.”

When looking at geographic location, there are many other factors that need to be taken into account including the longer-term availability and cost of electricity; communications infrastructure and data latency issues; data privacy; the need to ensure that latency-sensitive services (such as stock market transactions, issues of national security) are securely and proximally located; the presence of a local skilled IT services workforce; and an advantageous local taxation regime that encourages long-term public/private procurement strategies for electricity and other key resources.

Additional detail is available in the Gartner report “Greening the Cloud: Location Is Critical for the Sustainable Future of Outsourced Data Storage and Services." The report is available on Gartner’s website at

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