The Asia-Pacific region today faces a complex challenge: The growth of its digital economy is catalysing the rate of energy consumption like never before, and yet, the window to decarbonise is quickly narrowing. In fact, the very same drivers propelling digital growth – a rising middle class, connectivity advancements, and rapid urbanisation – will simultaneously contribute to a 3% increase in energy demand by 2030. Problematically, 75% of that energy demand is expected to be met by fossil fuels.
Among significant drivers for energy consumption is the increasing cloud adoption across the region, as organisations turn to the cloud for its scalability, agility, and flexibility that have become business-critical for growth. While transitioning from on-premises infrastructure certainly lends businesses better energy efficiencies overall, the reality is that data centres do account for a significant percentage of carbon output -- of up to 5%. With Asia already being one of the fastest-growing cloud markets, greening the cloud ecosystem will be critical to successfully furthering net-zero ambitions.
The age of sustainability-forward businesses
Thankfully, sustainability has risen the ranks in considerations for cloud solutions. A recent survey revealed that C-level respondents have ranked sustainability as their top criterion when considering a cloud storage provider or service – specifically, for more than half of IT decision-makers in Singapore.
After all, CEOs themselves are placing environmental sustainability in their top ten strategic business priorities as the pressure to reach global net-zero emissions grows exponentially. Furthermore, environmental, social and governance (ESG) efforts were identified as the third-highest priority for investors, behind profit and revenue.
The reasons for this are clear: While minimising one’s carbon footprint and the negative impact that IT operations can have on the environment is the noble and important goal of sustainability, what is also driving boardroom-level interest in sustainability initiatives is that there is a real business case to meet the green line. For instance, research points to the public cloud enabling the sustainability charge for businesses, with more energy-efficient infrastructure alongside greater workload flexibility, and better server utilisation rates. This also translates to better resource optimisation and overall cost savings for businesses themselves.
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Striking a balance
With such a compelling incentive, the transition to green businesses’ cloud ecosystem may appear simple enough. However, in adopting sustainable cloud solutions, organisations cannot afford to let business agility and cost-efficiency take a backseat – managing all three considerations will be key for overall business success. Exacerbating this challenge is the fact that businesses also face a growing cyber threat landscape, as well as increasingly strict data regulations. The reality is then that businesses are striving towards more sustainable cloud practices amidst a confluence of other factors that necessitate them to strike a careful balance, which can inevitably slow their progress on the green front.
As an example, alongside sustainability, businesses must also balance protecting data amidst the quickly evolving state of cyber threats in Asia-Pacific and increasing regulatory scrutiny over data sovereignty in the region. Growingly stringent regulations over data transfers and usage are unsurprising given that the region is one of the most targeted by cyber attackers – Singapore alone experienced a 54% increase in ransomware attacks in 2021. Led by stipulations around the security of transferring and storage of sensitive personal data overseas, businesses across the region now have greater local storage needs than ever before. This can be problematic for businesses that are looking to minimise cloud-related emissions but seem to now require more storage solutions than before.
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Considering this, cloud solutions that enable businesses to navigate these challenges would therefore not only have to be extremely energy-efficient in nature, but also trackable so that organisations can measure their overall carbon impact even as data sovereignty laws require storage in multiple local regions. In addition, businesses will need solutions that can simultaneously offer data protection to combat threats in the APAC cyber landscape, such as with object lock and data immutability, to ensure that they are not just compliant but also data-secure.
Building a mutually beneficial ecosystem
With that, the undeniable truth is that the cloud market has reached an inflexion point. Finding a middle ground will be critical for businesses to enjoy the advantages of the cloud, without sacrificing their sustainability ambitions. Fortunately, businesses are not on their own here. Cloud providers have ample opportunity to help organisations meet their business and ESG objectives, in a sustainable manner.
For one, with rising global energy costs, the conventional method of simply building more data centres to meet growing cloud demands will not be a viable option – especially in land-scarce countries like Hong Kong and Singapore. Singapore, too, now has a post-moratorium standard that mandates greener data centres that are in line with national sustainability targets.
With that, there is an urgency for cloud providers to, themselves, seek to bake sustainability into the core of their cloud infrastructure to improve the energy efficiency of their own offerings, and by extension, alleviate the carbon load on their customers. On the flip side, alternatives that do not ultimately improve energy efficiency will eventually lead to escalating energy costs which translates to increased costs for the provider, and therefore businesses.
Changes cloud providers can embark on include upgrading operations and hardware with strategic investments in newer, highly-efficient chips, network infrastructure, as well as technology like cooling systems. Making investments in products, procurement, innovation, and the wider supply chain is also one way cloud providers are seeking to infuse sustainability in the full lifecycle of a product, in efforts to drive a circular economy. Further to that, providers are also increasingly relying on consolidated data-driven tools to guide energy and service management processes on a broader scale, and the transition into cleaner energy, by having a holistic view of their energy sources, pricing, and utilisation.
Additionally, from a service provider’s perspective, ensuring the energy efficiency of cloud offerings alone is not enough. Complementing these investments with establishing reliable measurement of carbon footprint, such as cloud carbon calculators, for businesses is a logical and equally critical step. By providing a quantifiable measurement, businesses can effectively track and strategise on ways to manage, reduce, or offset energy consumption rates over time and determine how it should factor into their corporate goals.
Without enabling the wider business ecosystem with the tools to minimise their carbon output, all of the extensive investments made by cloud providers to deliver energy-efficient cloud solutions may be for nought. Ultimately, pursuing sustainability can lead to a win-win scenario for businesses and the environment, but only if approached as a long-term and iterative process. It is only through equal responsibility from all players in the ecosystem – businesses, cloud providers, and supporting regulatory frameworks – that Asia’s net-zero ambitions, and overall economic growth goals, can be met.
Sunny Chua, Singapore General Manager, Wasabi Technologies
