A Microsoft/Accenture/WSP report compared three applications used in-cloud and on-premises. "Though large organizations can lower energy use and emissions by addressing some of these factors in their own data centers, providers of public cloud infrastructure are best positioned to reduce the environmental impact of IT because of their scale." The report compared application use in three different sizes of enterprises, with smaller ones showing the greatest relative benefits:

The analysis suggests that, on average across the different applications, typical carbon emission reductions by deployment size are:
• More than 90 percent for small deployments of about 100 users
• 60 to 90 percent for medium-sized deployments of about 1,000 users
• 30 to 60 percent for large deployments of about 10,000 users

Google also reports dramatic cloud advantages, "…the annual carbon footprint of a Gmail user is about 1/80th that of a small business with locally hosted email servers…For a small office of 50 people, choosing Gmail over a locally hosted server can mean an annual per-user power savings of up to 170 kWh and a carbon footprint reduction of up to 100 kg of CO212. Larger organizations show smaller, though still impressive efficiency gains."

Pike Research reinforces these assessments from a macro perspective:

Growth in cloud computing has some important consequences for both greenhouse gas (GHG) emissions and sustainability. Thanks to massive investments in new data center technologies, computing clouds in general and public clouds in particular are able to achieve industry-leading rates of efficiency. Simply put, clouds are better utilized and less expensive to operate than traditional data centers…only the very largest of organizations – both commercial and governmental – will have the capital and expertise to achieve a similar level of efficiency at a comparable cost. As a result…much of the work done today in internal data centers will be outsourced to the cloud by 2020, resulting in significant reductions in energy consumption, associated energy expenses, and GHG emissions from data center operations versus a business as usual (BAU) scenario.

Specifically, Pike calculates

…data centers will consume 139.8 terawatt hours (TWh) of electricity in 2020, a reduction of 31% from 201.8 TWh in 2010. This also represents a significant decrease from the 226.4 TWh that would be consumed by data centers in the firm’s BAU scenario. The reduction will drive total data center energy expenditures down from $23.3 billion in 2010 to $16.0 billion in 2020, as well as causing a 28% reduction in GHG emissions from 2010 levels.

Pike anticipates worldwide cloud computing revenue increasing from $46.0 billion in 2009 to $210.3 billion by 2015, a CAGR of 28.8%.