Generative AI, cloud technologies, and carbon footprints are all directly connected. For me, one particular statistic brought this relationship to the forefront:
A single ChatGPT query consumes 10 times as much electricity as a Google search query.
A study from Golman Sachs revealed this finding as it warned the world that GenAI is poised to drive a 160% increase in data center power demand. Large language models rely heavily on cloud compute power which can have a domino effect on carbon emissions. Research from Vanson Bourne connects the same dots, showing AI and GenAI are responsible for uncontrollable cloud spending spikes averaging 30% over the past year. So, it’s easy to see how infrastructure expenditures can become a measuring stick for environmental impact — an early indicator of larger carbon footprints.
Monitoring the efficient usage of cloud services has become a popular trend due to the need to control IT budgets, but today the demand for cloud optimization and FinOps programs is taking a new turn given increased pressures to adopt Environmental, Social, and Governance (ESG) standards. With governments setting aggressive climate goals, customers becoming more eco-conscious, and investors demanding sustainability from their partners, environmental accountability has become a top priority. Google set a goal to achieve net-zero emissions by 2030.
Enter GreenOps—a strategic approach that aims to drive environmental sustainability across the IT infrastructure. GreenOps emphasizes measuring and reducing the carbon footprint of cloud operations through the efficient use of services and resources.
Understanding GreenOps
Sometimes called Green IT, the name GreenOps is an intentional mash up of the words “Green” and “Operations.” It aims to reduce carbon emissions, improve energy efficiency, and poke IT and the enterprise to make greener choices, which is becoming a significant concern as companies increasingly rely on a growing set of IT services.
And the strategy takes direct aim at cloud technologies.
Cloud data centers, while efficient, still require vast amounts of electricity. A single public data center can consume the same amount of electricity as 50,000 homes. GreenOps is about taking responsibility for that impact and making intentional, measurable decisions in daily operations. It centers on:
- Cloud Consumption: Optimizing cloud consumption from an environmental perspective
- Energy-Efficient Infrastructure: Consuming less power in data centers and reducing energy consumption across the IT stack
- Sustainable Vendor Selection: Selecting vendors and partners committed to sustainability, whether through data centers, energy practices, or manufacturing processes
- Circular Economy Principles: Finding ways to reuse or recycle hardware, reducing e-waste, and embracing responsible decommissioning strategies
- Environmental Metrics: Just as financial metrics track business performance, GreenOps relies on environmental metrics such as carbon emissions, energy usage, and environmental impact
GreenOps Regulations Pose New Business Challenges
Starting in September 2024, the Data Centers in Europe reporting program, a European Energy Efficiency Directive subsidiary, will require European organizations to report on data center environmental factors including power, water, physical footprints, temperatures and thermostat settings, renewable energy, and CO₂ emissions to name a few.
But as GreenOps becomes a business imperative, IT, finance, and procurement leaders face a new challenge: How to weave environmental initiatives into their IT operations and financial management practices so sustainability becomes a natural extension of the business.
This is where FinOps and GreenOps come together.
FinOps + GreenOps: Synergy in Sustainability
To understand GreenOps fully, it’s crucial to understand how it differs from and complements FinOps — the practice that aims to optimize the financial oversight of cloud services. FinOps is explained in depth here. While each might seem to address entirely different goals, they are more interconnected than you might think. Both are founded in optimization. Together, these two disciplines leverage optimization in the name of sustainability – whether the end game is environmental sustainability or financial sustainability.
How the Two Disciplines Work in Harmony
Optimizing Cloud Usage and Reducing Waste
FinOps and GreenOps teams can collaborate to optimize cloud usage in two dimensions: cost and environmental impact. FinOps teams focus on reducing waste in the form of underutilized resources to reduce unnecessary spending, while GreenOps teams look to remove waste as a means to reduce the environmental footprint. Together, they can select the most cost-effective and environmentally friendly options for cloud workloads. For example, moving non-critical workloads to times when energy is cheaper or derived from renewable sources can reduce both costs and emissions. This joint optimization ensures that cloud strategies are both financially viable and environmentally sustainable.
Data Tracking and Decision Making
FinOps emphasizes making purchasing decisions based on real-time data, such as costs per cloud workload. GreenOps can integrate environmental metrics into this equation. Cloud service providers, for instance, now offer tools that allow clients to track their carbon footprint within their IaaS platforms. By tracking carbon emissions and energy usage alongside expenses, businesses can make informed decisions that balance both environmental and financial outcomes. Having visibility into both sets of metrics enables IT leaders to adjust long-term strategies with a dual focus.
Vendor Selection
Both GreenOps and FinOps have a vested interest in vendor selection and management. FinOps assures cost-effective services, while GreenOps assures those services align with sustainability goals. Through collaboration, vendors are selected not just for their cost but also for their commitment to the environment.
Despite Common Goals, Collaboration is Lacking
Both GreenOps and FinOps work toward a common goal: optimization — improving efficiency, reducing waste, and creating a more sustainable operation. But according to research from the FinOps Foundation, most companies lack collaboration between these two teams. That is set to change in the future, however.
Research Says FinOps and Sustainability Team Collaboration is Low but Set to Grow
Tips for Uniting FinOps and GreenOps Strategies
For businesses to succeed in the green era of IT operations, collaboration between GreenOps and FinOps is key. The most successful implementations involve cross-functional teams where financial experts, sustainability officers, and IT professionals work together toward shared goals.
- Educate and Align Teams: Both FinOps and GreenOps are relatively new disciplines. Educating teams on how their roles can intersect and benefit from each other’s expertise is crucial. Procurement, finance, and IT should all be brought into the fold.
- Track Environmental Metrics alongside Financial Metrics: This will allow both FinOps and GreenOps teams to monitor and manage both financial and environmental performance.
- Prioritize Sustainable Cloud Vendors: Select cloud providers that offer sustainable solutions and provide transparency on energy usage and carbon emissions. Many cloud vendors now offer tools to measure environmental impact, which can be leveraged by both FinOps and GreenOps teams.
When aligned, the dual objectives of financial and environmental sustainability provide businesses with a powerful framework to manage any negative effects of cloud technologies and services.
Ready to bring your FinOps and GreenOps teams together? Talk to Tangoe.