In 2006, Amazon launched Amazon Web Services (AWS), a suite of cloud-computing services that offsets traditional information technology (IT) and provides on-demand computing, storage, and other IT services to customers. Cloud-computing services refers to the aggregation of data centers into centralized facilities that leverage economies of scale to cut costs and use virtualization, multitenancy, and other technology magic to provide information technology (IT) services to consumers on a consumption basis where you pay for only what you use. While for end users this provides significantly cheaper IT solutions, the massive data centers required to support it are expensive and require a significant amount of power. With increased attention on climate change and looming increases in regulations on power consumption, how and should Amazon continue to provide this service? The question boils down into two parts for Amazon: does AWS create cost and power efficiencies for its customers and are its data centers truly more efficient than traditional distributed IT.
With traditional IT infrastructure models, users own and manage their own resources, which range from servers and hard drives to networking gear and facilities. Under this model, they must procure enough IT capacity to support the demands of the end users that they are providing IT resources to. This means holding unused capacity available for use, which in turn necessitates unused facility space and the consumption of excess utilities like power and water. Naturally managing the demand of a small set or even a reasonably large set of consumers involves variability with peaks and troughs. Cloud infrastructure mitigates this through the law of large numbers and economies of scale. With a significantly larger number of customers, the demand curves smooth out resulting in easier to forecast growth and less waste. Furthermore, the large size of these environments allows resources to be shared and spread across them, decreasing overall overhead to support the consumed IT.
The challenges to these efficiencies are perhaps best depicted in a 2015 Greenpeace report titled “Clicking Clean”  that at a high level scored AWS as an F on energy transparency and D’s on “renewable energy deployment and advocacy” as well as “energy efficiency & mitigation.” Effectively the report calls to attention the idea that lowered costs from cloud providers like AWS allow for increased consumption of IT through increased digitization (think paper to on a computer) and streaming, among new IT changes. This results in overall increases in power consumption despite the aggregation and economies of scale. They specifically call out AWS for its lack of data on energy consumption and an absence of a roadmap for change, as well as the size of their estimates of its data center’s consumption and growth.
AWS responded with a series of blog posts  and a renewed commitment by leadership to achieve its long term goal of 100% renewable energy usage in its data centers. The blog posts call to light two ideas: (a) consumers overall save significant amounts of money and power and (b) AWS data centers rely increasingly on renewable power. The first major blog post noted that cloud customers consume 77% fewer servers, which effectively results in them consuming 84% less power and reducing their carbon emissions by 88%. Furthermore, they noted their recent purchase, deployment, and use of Wind Farms and Solar Farms. Per AWS’ tagline on its sustainability website: “AWS is committed to running our business in the most environmentally friendly way possible” .
As pressures increase to be more environmentally conscious, whether through organizations like Greenpeace or government/trade regulations (Kyoto Protocol), organizations like Amazon and its subsidiary AWS need to be increasingly conscious about their consumption. As the report by Greenpeace implies, it is not simply enough to create market efficiencies through scale and aggregation, firms must also grow with conservation and the protection of the environment in mind. AWS has continued this pursuit, noting that it aims to be 100% supported by renewable energy, but it should continue to improve in other areas as well. As noted in other blog posts by its technology and data center innovators like James Hamilton , there are also other ways to be more efficient through power distribution and air flow thermodynamics resulting in natural ways to cool and manage data centers. As a globally recognized business, it is important for organizations like Amazon to champion these causes now and before the environmental climate changes worsen further. (732 words)
 Greenpeace, “Clicking Clean.” http://www.greenpeace.org/usa/wp-content/uploads/legacy/Global/usa/planet3/PDFs/2015ClickingClean.pdf
 Barr, Jeff. “Cloud Computing, Server Utilization, & the Environment.” https://aws.amazon.com/blogs/aws/cloud-computing-server-utilization-the-environment/
 Amazon Web Services. https://aws.amazon.com/about-aws/sustainability/
 Hamilton, James. “Greenpeace, Renewable Energy, and Data Centers.” http://perspectives.mvdirona.com/2015/05/greenpeace-renewable-energy-and-data-centers/