Carbon emissions on the agenda at the hyperscale end of town
- 25 January, 2022 14:30
The carbon emissions of the world’s hyperscale cloud services providers is set to be among the top three criteria in enterprise cloud purchasing decisions by 2025.
This is according to analyst firm Gartner, which reckons that cloud sustainability initiatives will start in earnest with the leading cloud providers, which are some of the world’s largest data centre operators and critical to reducing IT-related carbon emissions.
This is important, because the top 10 largest cloud providers, by revenue, accounted for 70 per cent of all IT spending on cloud infrastructure, platform and application services, according to Gartner.
In fact, the starting gun for the race to reduce carbon emissions has already been well and truly triggered, with a chorus of tech players, particularly large global cloud and software vendors, clamouring to outdo each other in their race to reach net zero.
And for good reason.
According to Gartner, as environmental, social and governance (ESG) priorities and reporting receive growing levels of enterprise attention, an increasing number of organisations are boosting their investments in sustainability programs.
Indeed, roughly 90 per cent of organisations have ramped up investment in such programs since the start of the pandemic compared to investments in 2017, Gartner claimed.
Moreover, Gartner’s latest research suggests that environmental, ESG issues were among the top strategic priorities for 32 per cent of boards, representing a 100 per cent increase in interest over the 2021 figures.
In response, hyperscalers are aggressively investing in sustainable cloud operations and delivery, aspiring to eventually achieve net zero emissions within the decade, or sooner, according to Ed Anderson, distinguished research vice president at Gartner.
As such, Gartner expects increased availability of tools designed to help organisations calculate and reduce their carbon emissions through effective use of cloud services, similar to tools that assist in optimising cloud spending.
“Leading providers of cloud infrastructure and platform services are increasingly focusing on how they can disrupt higher-level business, compliance, societal and environmental issues,” Anderson said.
“While essentially all cloud providers have sustainability initiatives in place, their progress in meeting carbon reduction goals and strategies for achieving net zero carbon emissions varies wildly.
“Sustainability metrics and workload placement tools are still immature and not always transparent, making it difficult for organisations to fully and accurately assess true sustainability impacts of their cloud usage today."
“As stakeholders continue to push organisations to improve their sustainability posture, the more progressive providers will share their sustainability information publicly," he added.
From Anderson's perspective, stakeholder pressure will increasingly prompt providers to include such information in company disclosures, compliance and reporting.
According to Neil McMurchy, research vice president at Gartner, much of the drive behind such initiatives for big cloud services and software vendors is probably coming from the investment community.
“It [customer demand] is probably non-existent,” McMurchy told ARN last year. “But it’s going to change. Any publicly traded vendor is well advanced in terms of their ESG. From a capital market perspective, investors...are putting a value on compliance.
“The large vendors and smaller vendors too...whether it’s altruistic or if it’s the case that they don’t want to be a standout, those suppliers are going to do it.
“Eventually it will work through the procurement processes of end customers. Even now, there will be some procurement departments increasing their compliance focus on ESG.”
Beyond appeasing investors and other stakeholders, McMurchy suggested that making moves to address environmental considerations in the IT supply chain is probably good for business, for both vendors and their channel partners.
“It’s going to play out through procurement,” he said. “Does the channel need to worry about it at the moment? No. But they have to think about it because it will become part of what they need to do [to be on the playing field]."
“Ultimately, larger organisations are going to insist on a level of compliance right through the IT supply chain. Is it urgent? No. Is it demand driven? No. But why would you not do it? It’s ultimately good business,” McMurchy added.