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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

Sydney, Australia - 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

About Gartner:
Gartner, Inc. (NYSE: IT) is the world’s leading information technology research and advisory company. Gartner delivers the technology-related insight necessary for its clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, Gartner is a valuable partner to 60,000 clients in 11,500 distinct organizations. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, Gartner works with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,500 associates, including 1,250 research analysts and consultants, and clients in 85 countries. For more information, visit


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