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The digital services churned out by the world’s computer centres are multiplying. Their energy use is not, thanks to cloud computing, a new study says.

Source: Cloud Computing Is Not the Energy Hog That Had Been Feared – The New York Times

The New York Times story refers to a study published in the journal Science: Recalibrating global data centre energy use estimates.

It starts:

Data centres represent the information backbone of an increasingly digitalised world. Demand for their services has been rising rapidly. Data-intensive technologies such as artificial intelligence, smart and connected energy systems, distributed manufacturing systems, and autonomous vehicles promise to increase demand further.

Given that data centres are energy-intensive enterprises, estimated to account for around 1 percent of worldwide electricity use, these trends have clear implications for global energy demand and must be analysed rigorously.

Efficient cloud computing

There’s a common belief that accelerating data processing means the energy used to power data centres is rising fast. It turns out it is not.

Data centres did six times as much computing work in 2018 as in 2010. Yet their power consumption increased only six percent.

There’s also evidence computing means less pollution and greenhouse gas than we feared.

The reason for the new optimism is the amount of work that has shifted to the cloud. And not just any old cloud. Most has moved to the bigger and more energy efficient services.

Low carbon

Cloud giants like AWS and Microsoft run huge data centres. Many place their data centres where they can use low carbon energy. Hydroelectricity and solar power are favourites. Some are located in naturally cold places. This means less need for air conditioning.

Big cloud companies use technologies that pack more computing and storage into ever smaller hardware. Small hardware is usually more efficient.

Energy efficiency is good for the environment. It’s also good for the cloud companies. Energy is often a significant cost. Cloud companies love to boast about their clean energy. It also helps them win business.

wellington cloud
wellington cloud

Four years ago Microsoft lost its mojo. The software giant had failed to compete in web search.

People questioned whether Microsoft was on an IBM-style path to irrelevance. When the phone business flopped, it looked like Microsoft’s time in the sun was over.

Today it is back. The 2017 Microsoft is a different beast, the main reason for its revival is a successful transition to selling cloud computing services. Microsoft’s birth isn’t yet on the same scale as Apple which came back with the iPhone, but that can still happen.

This week Microsoft reported quarterly profits that are more than twice the level of a year earlier.

It’s not all good news. Some of the jump was down to the company realising a tax benefit after writing off its failed mobile phone business.

Fast growing cloud transition

Yet that’s the past The important part of the quarterly announcement is that Microsoft’s cloud business is growing at a clip. That was enough to send the share price up three percent.

This wasn’t the first quarter where Microsoft’s cloud business was the star of the show. It’s been climbing for years now. In the latest quarter Intelligent Cloud revenue was up 11 percent to US$7.4 billion. Revenue for the company’s Azure cloud services was up almost 100 percent.

While Azure still trails behind Amazon Web Services, there is clear blue sky between Microsoft and the next set of cloud service providers. Being second in the most important market of the day is a huge win for Microsoft.

Azure profits

At the same time, cloud economics means it is close to a winner takes all game. Amazon and Azure share almost all the cloud profits.

The other cloudy good news from Microsoft is that revenue from the cloud version of Office 365 went past traditional software sales for the first time. There are now 90 million Office 365 users on iOS and Android. That is a big thumbs up for CEO Satya Nadella’s decision to support non-Microsoft operating systems.

Although Microsoft is doing a better job of transforming than rivals like IBM, Oracle or Google, it isn’t in the clear yet. Sales of Surface devices fell two percent during the quarter. Meanwhile enterprise service revenues fell. Yet it appears to be keeping pace with AWS, that’s something no-one else can manage.


Remi Galasso’s dream to build the Hawaiki trans-Pacific cable became a reality earlier today.

Prime Minister John Key and Communications Minister Amy Adams joined other dignitaries to help Galasso get the project started at a soil turning ceremony hosted by local iwi at Bream Tail near Mangawhai Heads in Northland.

Speaking at the event Key says a whole bunch of New Zealanders don’t know this is happening. Yet, he says the cable: “Is far more important to the average New Zealander than they realise. We need more connectivity and that’s what Hawaiki is all about.”

No more single cable risk

Key said that for a long time New Zealand relied on a single cable network. He said it is an area where “you need to keep investing”. He told guests the Hawaiki cable would increase New Zealand’s telecommunications security and bring jobs and development to Northland.

Communications Minister Amy Adams expanded on that theme. She says there’s evidence that businesses cluster around cable landing points. Adams sees opportunities for data centres to set up in the Mangawhai Heads area.

When it starts operation in June 2018 the $500 million Hawaiki cable will be the second submarine cable linking New Zealand and Australia to Hawaii and the mainland United States.

Third submarine cable

By that time it will be New Zealand’s third submarine cable operator and the fourth international data link.

At present there is a single cable network connecting New Zealand to the rest of the world. The Southern Cross Cable Network has two strands, which means there’s a degree of redundancy. Yet relying on one company is a case of putting all our eggs in a single basket.

Early next year the Tasman Global Access cable will link New Zealand to the East Coast of Australia.

At this stage Hawaiki has a design capacity of 42 Tbps. This makes it the fattest pipe between Australia, New Zealand and the USA.

Vital link

Submarine cables are rarely front-page news. Many think they are unglamorous, but as the Prime Minister underlined, they are vital to the nation’s economy.

Malcolm Dick, who last year sold his share of CallPlus joined Sir Eion Edgar earlier this year to invest in Hawaiki which boasts all-New Zealand equity funding.

At the launch event Dick says all the time he was running a telecommunication business he worried about having a single cable provider. He says he wondered what would happen if that failed.


As well as equity investors Galasso managed to find a some key partners to help get the project off the ground. These include REANNZ, Vodafone and Amazon Web Services.

Reannz, the Research and Education Advanced Network, is a crown-owned high-performance computer network that services the needs of researchers and academics. It was among the first customers to sign to Hawaiki and has a $65 million anchor tenancy contract.

Reannz chief executive Nicole Ferguson underlined the need for new capacity. While there is plenty of headroom for now, the demand for data is increasing at such a rate that the existing Pacific cable network could now reach its full capacity before the end of its commercial life. She says there is a need for a diversity of supply.

Amazon Web Services interest in Hawaiki is, in part, down to the rapid increase in its New Zealand cloud services business. AWS depends on international connectivity to connect customers to its data centres.

Hawaiki is not the first project aiming to add trans-Pacific submarine capacity. The Pacific Fibre project failed in 2012 because it could not raise enough money through financial institutions. It also ran into problems over US fears about its partnership with Huawei Marine.

AWS Summit Auckland

Amazon Web Services has made huge progress in a short time. The business is only ten years old. And yet It doth bestride the narrow world like a Colossus[1].

At least AWS dominates the narrow worlds of enterprise IT and cloud computing.

Dominate is an understatement. The company created cloud computing and remade today’s enterprise IT world in its own image.

AWS is secretive about numbers, but expect revenues north of US$10 billion in 2016. In the first quarter it took US$2.6 billion. Growth is a whopping 64 percent year-on-year.

AWS Auckland Summit

The AWS Summit Auckland is now New Zealand’s second biggest technology event. Microsoft TechEd — rebranded this year as Microsoft Ignite — remains number one.

You can’t move in the enterprise computing world without hearing the AWS name. It killed business hardware sales. The old big name brands struggle to give servers away these days.

Thanks to AWS, Microsoft spent billions building its own Azure cloud capacity. It is number two and has some great cloud technology, but still trails AWS. IBM is even further behind.

On every list

The rest of the IT market shudders and crosses itself when customers mention AWS. Make no mistake, the company is somewhere on almost every sizeable organisation’s technology shopping list. Even if they don’t buy AWS, they’ll benchmark their chosen cloud suppliers against Amazon.

AWS has the cream of New Zealand’s technology sector among its customers. At the Auckland Summit it paraded the local royalty: Xero, Vend, eRoad and Orion Health. The New Zealand Defence Force featured in the keynote.

And yet during a media panel session, AWS’ Richard Busby says: “We don’t have significant market penetration”.

Busby has a point. Revenues are small in comparison with the total IT spend. It earns US$10 billion a year. That is small compared to revenue at Microsoft, Apple, Google or HPE.

Gartner estimates cloud accounts for a mere 4 percent of the entire technology market. Yet it is fast-growing while other areas are static or in decline. The analyst company says total cloud spending will be US$240 billion next year.

Partner bazaar

Much of the value in AWS sales goes to consultants and integrators. There was a bazaar-like atmosphere at the Summit. There local partners pitched for AWS-related work. It’s a vibrant, bustling secondary market.

Partners include New Zealand’s Datacom and Revera. Apart from anything else, the pair connect AWS to the government cloud panel.

Busby went on to say: “It’s still early days for AWS, in training and skills we’re only getting up to speed.”

Glenn Gore, head of technology, Amazon Web Services, Asia-Pacific is more specific.

He says AWS market penetration in government is still low relative to other sectors. In part that’s because New Zealand’s government has only recently come to terms with sending data overseas.

He says AWS does better in certain industries; banking, insurance and the financial sector. Gore says Australia’s — and New Zealand’s — big banks all have some business with AWS.

Expanding scope

Meanwhile AWS continues to expand its scope.

Few weeks pass without AWS announcing another new service. The company hosts them in giant data centres and delivered over the internet. Most sell for a few dollars a month. Once businesses needed to spend vast sums of capital to get the same functions.

Today it offers a bewildering array of services. They range from raw number crunching, to storage and up to the lofty reaches of machine learning. Last year AWS let slip over one million companies worldwide now use its services.

At the Auckland Summit AWS said has 1,000 partners in Australia and New Zealand who service “tens of thousands of customers”.

The rise of Amazon rocked the entire computer industry, not just the enterprise market.


Hewlett-Packard’s split into two companies was a direct response to the challenge. So was Dell’s decision to go private, then buy EMC.

Microsoft swapped Windows-era CEO Steve Ballmer for cloud-era Satya Nadella. IBM and Oracle reeled from the Amazon competition.

Even wealthy Google is pouring its rivers of gold into building Amazon-like cloud services.

Not every organisation finds it easy to move to the cloud. For every cloud native like Xero or Vend, who whip through the transition, there are those who struggle. Gore says the ones who find it toughest are those who start with a bad architecture.

For them, the answer is to move via an interim step; the hybrid cloud. These organisations might move some functions to the cloud now, while they keep old systems hanging on until they are ready to move.

Cloud transition

There are two ways of making the transition. Some look at which apps are likely to do well in the cloud, while others start with areas of their technology that are currently failing. It’s a simple matter of methodology. What no longer appears to be on the agenda is large numbers of organisations saying they don’t plan to move.

AWS may have been slow in the past to offer the services to help these more conservative customers move. To be fair, when you’re growing at 60 percent a year, there’s enough work managing the demand. Now it says it has a managed services programme to help customers prepare for their cloud future.

Amazon’s cloud growth has been exceptional. Until ten years ago the company’s computers were running its online retail operation. Now they run a large slice of the world’s business. But others are learning how to do the same. Microsoft and Google have cloud operations which are growing as fast. One thing is clear, AWS won’t be able to talk about not having market penetration for much longer.

  1. Borrowed from William Shakespeare, Julius Caesar.  ↩


A partnership with Australian national network provider Nextgen means Intellipath has expanded its reach creating what may be the region’s largest bandwidth-on-demand service.

Intellipath previously only offered its services in New Zealand, the west coast of the USA, Sydney and Melbourne. The deal with Nextgen means it now covers the rest of Australia including Perth, Brisbane, Canberra and Adelaide.

It now reaches 45 Australian data centres and a total of 63 worldwide. The network has connections to the main Australian data centres including Metronode, Equinix and NextDC. It reaches all the main cloud services including AWS and Azure.

IntelliPath is a subsidiary of Vibe Communications. In effect, it offers a wide-area-network as a service.

This works in much the same way as companies already buy cloud computing services on demand. IntelliPath allows them to create a contract-free communications link in a matter of seconds.

In practice it means an organisation can respond immediately to a business need or an emerging opportunity, only paying for the communications services they consume at the time.