Anytime a business owner goes online to bank, shop for equipment or place a classified ad for a new employee, chances are they are navigating what’s become known as the cloud — a metaphor for the Internet where business transactions are more and more commonplace and economically sensible.

And Phoenix, interestingly, has its own slice of this cloud with large data centers operating in the desert, free from natural disasters and other forces that could impact the vital necessity of data being available and uninterrupted in a 24/7/365 environment.

While data centers use a significant amount of energy — think of the thousands of computer servers housing banking operations, business software and more — data centers are being recognized for their positive impact on the environment.

The reason is simple: Data centers move business into the digital age. Processes that are digitized produce less carbon emissions than their analog counterparts, and data centers provide the infrastructure enabling this digitization to occur. Both serve as the foundation for an energy-efficient enterprise.

The transition from physical, “offline” processes to digital, online processes is referred to as digitization or dematerialization. Research has shown that by digitizing or “dematerializing” processes there is a significant decrease in carbon dioxide emissions. Large, modern, commercial-grade data centers utilize the latest technologies and provide energy savings through economies of scale.

With the advent of the commercial Internet in the 1990s, companies have improved how they interact with their customers, partners and employees. Prior to the World Wide Web and e-mail, businesses and government transacted in mostly inefficient and unconnected ways. For example, in order to pay a bill, the customer would send a paper-based check by mail, which would be delivered to the recipient by way of a network of carbon-emitting postal vehicles.

Today, bills can be paid online in a matter of minutes. By digitizing this offline process, the need for material (i.e. paper) to be created and transported has been eliminated. This in turn has resulted in a significant reduction in CO2 emissions.

Over the past 20 years there have been hundreds, if not thousands, of offline processes that have been digitized — everything from software distribution to financial transactions to medical record keeping. The combined effect of all of these digital processes is a macro-scale reduction in the overall use of materials and a more efficient distribution of the materials.

The impact of dematerialization has been quantified by a number of prominent corporations and research institutions, including Microsoft, Intel, Lawrence Berkley Labs and Stanford University.

A recent paper by Dr. Jonathan Koomey, senior researcher for Lawrence Berkley Labs, studied the impact on CO2 emissions resulting from the purchase of music online as compared to the purchase of a compact disc at a music store. Their research shows that the process of purchasing music online can reduce CO2 emissions, on a conservative basis, between 40 percent and 80 percent.

A comparative carbon footprint study of Microsoft’s Office 2007 product suite found that the digital delivery of their product to customers reduced carbon emissions by 88 percent.

According to NPG Group, Apple leads the U.S. with 25 percent of all music sold, surpassing both Wal-Mart and Apple’s iTunes music service has materially changed the way music is purchased and in so doing has eliminated a substantial portion of the carbon footprint related to the offline distribution of music.

iTunes, software distribution, online bill payment and many other digital services are delivered by a complex array of IT systems, including servers and telecommunications networks. These servers and networks are located in data centers. Data centers provide the infrastructure (i.e. power, cooling, network access) required by these digital services to function.

Most corporate data centers are built to accommodate the IT needs of a single business unit or department. Large, commercial-grade data centers leverage the economies of scale to reduce energy consumption. Instead of operating 10 smaller data centers, an organization could consolidate its IT infrastructure into one or two large data centers and reduce the costs and energy associated with operating separate cooling, UPS, backup power and network access systems.

Modern data centers use the latest technologies and engineering best practices including variable frequency drives, light-emitting diodes (LED) fixtures, thermal energy storage, photovoltaic (PV) solar arrays, ultrasonic humidification and sealed cabinets. Collectively, these systems contribute to a significant reduction in energy consumption — especially during peak load periods.

By combining digitized processes with the economies of scale recognized at large, modern, commercial-grade data centers, today’s enterprise can materially reduce the energy it consumes and greatly improve its efficiency. As consumers, businesses and government look for more efficient ways to communicate and transact, dematerialization and data centers will provide the foundation for a more energy efficient enterprise.

Arizona Business Magazine Jul/Aug 2010