Apple, cloud computing, and enterprise supply chain management

Solar power

Apple’s recent announcements around renewables and supply chain transparency, put the major cloud providers to shame.

Apple had a couple of interesting announcements last week. The first was that they were investing $848m in a 130MW solar farm being built by First Solar in California. With this investment, Apple enters into a 25 year power purchase agreement with the solar farm, guaranteeing income for the solar farm, and securing Apple’s energy bills for the next 25 years in California. According to First Solar this is the largest agreement in the industry to provide clean energy to a commercial end user, and it will provide enough energy for Apple to fully power its headquarters, operations and retail stores in California, with renewable energy.

For it’s data centers, which hosts Apple’s iCloud, App Store, and iTunes content, Apple uses 100% locally generated, renewable energy. It’s Maiden, North Carolina data centre, for example, uses a combination of biogas fuel cells and two 20‑megawatt solar arrays — the largest privately owned renewable energy installation in the US, according to Apple. And it is now investing another $55 million in a third, 100-acre 17.5MW plant for the facility. You can find details of Apple’s other data centre facilities, and how they are powered by renewables, here.

Apple's Maiden Data Center Solar Array

Apple’s Maiden NC Data Center Solar Array

The second announcement from Apple was the publication of its 2015 Supplier Responsibility Progress Report (highlights here, full PDF here). Apple has been criticised in the past for workers rights violations in its supply chain, so it is good to see Apple taking very real steps, positive, to address this. The amout of detail, the steps taken, and the levels of transparency in the report are impressive.

On underage labour, for instance, Apple’s policy requires that

any supplier found hiring underage workers fund the worker’s safe return home. Suppliers also have to fully finance the worker’s education at a school chosen by the worker and his or her family, continue to pay the worker’s wages, and offer the worker a job when he or she reaches the legal age. Of more than 1.6 million workers covered in 633 audits in 2014, 16 cases of underage labor were discovered at six facilities — and all were successfully remediated.

Apple also has strict policies around work week hours, health and safety, sourcing of conflict minerals, and the environment. In order to increase its transparency, Apple publishes its Supplier Code of Conduct, its Supplier Responsibility Standards, its Conflict Minerals Standard, as well as a list of its smelter suppliers and its top 200 suppliers amongst other documents. And Apple’s comprehensive list of environmental reports are published here.

What does this have to do with cloud computing and the enterprise supply chain management?

Well, Apple recently partnered with IBM in order to expand its userbase into the enterprise space. And it has opened its iWork office suite to anyone with an Apple ID, no Apple device required – though this was long overdue.

Comparing Apple’s cloud offerings to actual enterprise cloud players (or any cloud players, for that matter), you see there’s a yawning chasm in terms of transparency, reporting, and commitment to renewables.

Of the main enterprise cloud players:

  • Microsoft publish their Citizenship Report here [PDF]. And while it is a decent enough report, it doesn’t go into anything like the level of detail that Apple does. On page 53 of this report Microsoft mention that 47% of the energy it purchases is renewable. It does purchase renewable energy certificates for the other 53% so it can report that it is carbon neutral.
  • Google doesn’t produce a corporate sustainability report. Instead it has this page which outlines some of the work it does in the community. Information on Google’s energy breakdown is sparse. What is published is found on the Google Green site, where we find that although Google has many investments in renewable energy, and Google has been carbon neutral since 2007, Google’s actual percentage of renewables is only 35%.
  • IBM has a good history of producing corporate reports (though it still hasn’t published its report for 2014). However on the energy conservation section of IBM’s corporate report, IBM reports that sources 17% of its electricity came from renewable sources in 2013. However, they go on to note that this does not include the energy data of Softlayer – IBM’s cloud platform.
  • Cloud Providers Energy and Transparency

  • And finally, Amazon, who have arguably the largest cloud computing footprint of any of the providers, is the worst performer in terms of reporting, and likely in terms of emissions. The only page where Amazon mentions emissions, claims that it has three carbon neutral regions, but fails to say how they have achieved this status (or whether they are third party audited as such). The same page also claims that “AWS has a long-term commitment to achieve 100% renewable energy usage for our global infrastructure footprint” but it fails to give any time frame for this commitment, or any other details on how it plans to get there.

Taking into account last November’s historic deal between the US and China on carbon reductions, and the upcoming Paris Climate Change Conference in December this year (2015), where there are very likely to be binding international agreements on carbon reductions. This will lead inevitably to increased requirements for CO2 reporting from the supply chain.

With that in mind, including the % renewable energy as one of the factors when choosing a cloud provider, would be a very wise move.

As pointed out to me on Twitter:

In that case, you could always go with GreenQloud. GreenQloud bill themselves as a drop-in AWS replacement and being based in Iceland their electricity is 100% renewable.

Photo credit NAIT


SAP to power its cloud computing infrastructure from 100% renewable energy

Wind turbine

Cloud computing is often incorrectly touted as being a green, more environmentally-friendly, computing option. This confusion occurs because people forget that while cloud computing may be more energy efficient (may be), the environmental friendliness is determined by how much carbon is produced in the generation of that energy. If a data centre is primarily powered by coal, it doesn’t matter how energy efficient it it, it will never be green.

We have mentioned that very often here on GreenMonk, as well as regularly bringing it up with cloud providers when talking to them.

One such cloud provider is SAP. Like most other cloud vendors, they’re constantly increasing their portfolio of cloud products. This has presented them with some challenges when they have to consider their carbon footprint. In its recently released 2013 Annual Report SAP admits

Energy usage in our data centers contributed to 6% of our total emissions in 2013, compared with 5% in 2012

This is going the wrong direction for a company whose stated aim is to reduce the greenhouse gas emissions from their operations to levels of the year 2000 by 2020.

To counter this SAP have just announced

that it will power all its data centers and facilities globally with 100 percent renewable electricity starting in 2014

This is good for SAP, obviously, as they will be reducing their environmental footprint, and also good for customers of SAP’s cloud solutions who will also get the benefit of SAP’s green investments. How are SAP achieving this goal of 100 per cent renewable energy for its data centers and facilities? A combination of generating its own electricity using solar panels in Germany and Palo Alto (<1%), purchasing renewable energy and high quality renewable energy certificates, and a €3m investment in the Livlihoods Fund.

So, how does SAP’s green credentials stack up against some of its rivals in the cloud computing space?

Well, since yesterday’s pricing announcements from Google they definitely have to be considered a contender in this space. And what are their green credentials like? Well, Google have been carbon neutral since 2007, and they have invested over $1bn in renewable energy projects. So Google are definitely out in front on this one.

Who else is there?

Well, Microsoft with its recently branded Microsoft Azure cloud offerings are also a contender, so how do they fare? Quite well actually. In May 2012, Microsoft made a commitment

to make our operations carbon neutral: to achieve net zero emissions for our data centers, software development labs, offices, and employee business air travel in over 100 countries around the world.

So by doing this 2 years ahead of SAP and by including employee air travel, as well as facilities, you’d have to say that Microsoft come out ahead of SAP.

However, SAP does come in well ahead of other cloud companies such as IBM, who reported that renewable electricity made up a mere 15% of its consumption in 2012. IBM reported emissions of 2.2m tons of CO2 in 2012.

But, at least that’s better than Oracle. In Oracle’s 2012 report (reporting on the year 2011 – the most recent report available on their site), Oracle state that they don’t even account for their scope 3 emissions:

Scope 3 GHG emissions are typically defined as indirect emissions from operations outside the direct control of the company, such as employee commutes, business travel, and supply chain operations. Oracle does not report on Scope 3 emissions

And then there’s Amazon. Amazon doesn’t release any kind of information about the carbon footprint of its facilities. None.

So kudos to SAP for taking this step to green its cloud computing fleet. Looking at the competition I’d have to say SAP comes in around middle-of-the road in terms of its green cloud credentials. If it wants to improve its ranking, it may be time to revisit that 2020 goal.


Don’t forget – where your cloud apps are hosted helps determine their carbon footprint


Back in July of this year (2011), the Carbon Disclosure Project (CDP), in conjunction with Verdantix, released a report titled Cloud Computing – The IT Solution for the 21st Century [PDF warning] which erroneously claims Cloud Computing is Green. Shortly after it was released, I wrote a long post outlining exactly where the report was flawed. I also contacted the CDP directly outlining my concerns to them and pointing them to the blog post.

Then, a couple of weeks back, when preparing my slides for my Cloud Computing’s Green Potential talk for the Cepis and Hepis Green IT conference in Athens, I discovered that Verdantix and the CDP had published

a new report [PDF] on the business and environmental benefits of cloud computing in France and the UK

Unfortunately, not only does the new report make the same mistakes as the original one, but it further compounds those errors with an even more fundamental one.

Let me explain.

In the key assumptions section of the report it talks about the metric tons of CO2/kWh in both the UK and French electricity grids (0.000521 tonnes and 0.000088 tonnes respectively). It uses these figures to extrapolate the savings in both France and the UK for companies migrating their applications to cloud computing.

So? You say. Sounds reasonable to me.

Well, the issue is that they didn’t do any work to identify where applications migrated to the cloud would be hosted. The implication being that UK applications migrated to the cloud, will be hosted on UK cloud infrastructure and French IT applications will be migrated to French hosted cloud infrastructure. In fact this would be a highly unusual scenario.

A quick look at where most cloud hosting takes place shows that the vast majority of it is occurring in the US, with quite a lot happening in Singapore with a lesser amount in Europe (and that split between Ireland, Germany, UK, etc. but almost none in France – Ireland is underestimated in the list as it doesn’t include Microsoft which has a significant Cloud hosting facility in Dublin which it is now expanding or Google’s Dublin facility).

Ok, and what about the carbon intensity of electricity generation in these countries? If a cloud application is moved to somewhere with a lower carbon intensity for electricity generation, then there is a possibility of a carbon saving. However, with the vast majority of cloud hosting still being done in the US, that isn’t a likely scenario.

This table of CO2 emissions from electricity generation, by country shows that the US has one of the most carbon intensive electrical grids in the world. France, on the other hand, with its high concentration of nuclear power (78%) has one of the least carbon intensive electricity grids in the world. While the UK grid’s carbon intensiveness at 557kg CO2/mWeh sits just above the world average of 548kg CO2/mWeh.

While it is possible (though not probable) that UK IT applications outsourced to the cloud would be hosted in a country with a lower carbon intensity than the UK, the chances of a French IT application being hosted in a country with a lower carbon intensity than France are virtually nil.

Given this, the assertion by the CDP report that

large businesses in France and the UK can reduce CO2 emissions from their IT estate by 50% compared to a scenario where there was no cloud computing.

seems, at best, extremely improbable.

One problem with coming up with reports like this is the lack of transparency from cloud providers on their locations, their energy and carbon footprints. If all cloud providers reported these metrics, it would be a far simpler matter to decide whether cloud computing is green, or not. Without these data, there is absolutely no way to say whether moving to the cloud increases or decreases CO2 emissions.

If you are wondering why the Carbon Disclosure Project and Verdantix are so bullish in their assertions that Cloud Computing is Green – if you scroll to the bottom of the report, you’ll see this:

CDP & Verdantix's motivations

This study was supported by AT&T
For more information on AT&T Cloud Solutions go to …

The report was paid for by the Cloud Solutions division of AT&T. Enough said.

Photo credit fotdmike