Leveraging the cloud for Green IT

The third paper we want to look at, A. Spellmann et al., “Leveraging the Cloud for Green IT: Predicting the Energy, Cost and Performance of Cloud Computing” (1),  deals with the green aspects of cloud computing. This might not look like a paper contributing very much to cloud computing economics at first fight. This paper was chosen because it provides an interesting comparison of an on premises IT infrastructure and a solution in the cloud. The comparison is presented as a case study trying to answer the question “Should we expand an on-premise infrastructure to handle the expected growth, or should we leverage the cloud to support the increased workload volume?”. The case study is based on a Web-based system that resembles the TPC-W benchmark (2).

The authors have selected a scenario with certain business requirements as follows. First they assume that the peak workloads to double over the next few months.  As security of the customer data is high priority is high priority, the database will remain on premise. Cloud resources are considered to cover the doubling of the workload  for the non database tiers.  As an input they also have daily and hourly workload volumes.  They chose EC2 as the cloud service to evaluate.

To make the comparison viable they set up both scenarios (on premise vs. cloud) to meet the business requirements. The cost comparison shows cumulative monthly costs for EC2 Small Instances with and without data transfer (plus the on-premise energy costs for just on-site systems) in comparison to the on-premise costs (new hardware plus energy costs for the fully built out on-premise server infrastructure).

The on premise costs comprise of hardware and energy consumption.  While the initial capex into hardware is around 50.000$ paid at the beginning of year 0, the variable energy costs are about 3.000 $ per month.

The cloud costs of around 7.000$ per month comprise of cloud instance costs, cloud data transfer costs and on-premise energy costs (for the initial set of baseline severs). 77% of the monthly costs are instances and data transfer, the rest is energy.

The results show that the on-premise solution starts off at a higher cost point due to the extra servers to handle the expected workload growth (31 new servers). The cloud solution does not incur those costs.   After only 12 months, the cumulative costs of  EC2 scenario surpass the costs of the on-premise solution and after 2 years they are already 30% higher.


This paper does a good job in showing that moving to the cloud does not necessarily mean that it will save you money in the long run. Admittedly the approach seems to be rather academic omitting many factors that need to be accounted for in a real life scenario. We do not see any costs for migrating the infrastructure into the cloud. There are also no considerations done regarding risks. What does it cost, the move to the cloud does not work out as expected, and the migration has to be reversed? Apart from that the authors have chosen  rather short time horizon in their evaluation. Cloud computing is currently regarded as an operational move that can save an enterprise money quickly.  We think that a sober analysis of to cloud or not to cloud can only be done when taking strategic and risk aspects into consideration.

  1. A. Spellmann et al., “Leveraging the Cloud for Green IT: Predicting the Energy, Cost and Performance of Cloud Computing.”
  2. D. A Menascé, “TPC-W: A benchmark for e-commerce,” IEEE Internet Computing 6, no. 3 (2002): 83–87.

About Georg Singer

Georg Singer is an analyst at the University of Tartu in Estonia. He works for the institute for computer science on cloud computing economics.

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