Green Cloud? An Empirical Analysis of Cloud Computing and Energy Efficiency.

This article examines the impact of cloud computing on users' energy efficiency within the U.S. economy from 1997 to 2017, employing a novel industry-level measure of cloud-based IT services and a two-stage stochastic frontier analysis. It finds that cloud computing, particularly software-as-a-service (SaaS), significantly improves energy efficiency by facilitating energy-efficient production across industries, while infrastructure-as-a-service (IaaS) enhances electric energy efficiency mainly in hardware-intensive industries by reducing energy consumption of internal IT equipment. The study estimates that user-side energy cost savings from cloud computing in 2017 ranged from USD 2.8 to 12.6 billion, exceeding the energy consumption of cloud service vendors and comparable to total U.S. data center electricity use. These findings highlight the importance of considering both user- and vendor-side effects to fully assess the environmental implications of cloud computing and offer insights for business managers, cloud providers, and policymakers aiming to balance economic and sustainability goals.