SaaS v. On-premises Software: Which One is More Green?

In case you haven’t heard (or aren’t obsessively following IT trends like we are), the great trend in software is the evolution from traditional “on-premises” software (e.g. client/server software installed at the office) to Software as a Service (SaaS) (i.e. web-based applications that are managed in the vendors’ data center and accessed “on-demand” through a web browser).

Given what’s at stake for software companies in either camp, debating the merits of each model has led to some fiery discourse. We thought we’d fan the flames by introducing another angle: which model is “greener;” that is, better for the environment.

Understanding the Models

On-premise software is what most people think of when they think of a software system. You pop in a CD or download a big file from the Internet and the install begins. Files are copied to your computer and/or a server machine, where they are stored and run. Because the client and server software components are both doing a lot of computations, a fair amount of power is required.

With SaaS, there is no local installation of software because the vendor manages all the code and the data in their data center. Users access the system through a web browser and its primary role is to present the user interface – not a very computationally intensive function.

On-Premise Energy Consumption

Now let’s dig into the power consumption of the on-premise model. We’ll use the example of a typical physician practice, since electronic medical records (EMR) software is a market we know well. The “On Premises” side of the graphic below illustrates a four-physician medical practice, running EMR software on their own in-house server.

The HP ProLiant DL server, one of the most commercially popular servers on the market today, will consume 7,008 KW of server energy per year. That’s running 24 hours a day, 365 days a year.

In addition, each user is using a Dell desktop 546, Dell’s most popular starter desktop. A single 546 Dell desktop will consume 600 KW of energy a year, running 8 hours a day for 250 days a year (an average work year).

A four-physician practice will consume 9,408 KW of power each year just to run EMR software on-premise. Each user will personally consume 2,352 KW of power each year.

SaaS Energy Consumption

Now let’s see how the energy consumption of SaaS software stacks up.  Rackspace, one of the largest providers of cloud computing hosting services, lists the Dell PowerEdge 2950 III as one of it’s most popular server choices. And since a data center would have a redundant server in addition to the PowerEdge, our SaaS applications are powered by two of these servers.

Running 24 hours a day for 365 days a year, the total energy consumption for these two Dell servers running SaaS applications would be approximately 6,570 KW/yr each, or 13,140 KW/yr total.

However, in a modern SaaS data center there are economies of scale that enable the software vendor to run many customers on the same server (or small number of servers). The first way they might do this is to develop a “multi-tenant” architecture. That is, much like many people can share the same apartment building, SaaS customers can share the same software application and server. Extending the analogy, each SaaS user has their own passwords and permissions just like each tenant in an apartment building has their own set of keys.

Running this server in a SaaS data center allows the SaaS EMR vendor to tens or hundreds of customers on one server. When a new customer goes line with the application, the incremental computing requires – an power consumption – increase only marginally.

How does this affect energy consumption by our physicians?

Now our physicians are only using 131.4 KW (1/100th) of the Dell PowerEdge server energy each year because of the multi-tenant architecture. Also, because SaaS applications require less computing power on the client, the physicians are able to switch to more efficient Dell netbooks, which only consume 120 KW of power each per year.

Using SaaS, our four physician practice now only consumes 611.4 KW per year running their EMR software. That’s 152.85 KW per year, per physician.

That’s an 93% reduction in overall energy consumption for a four physician practice using SaaS EMR software over on-premise software!

Beyond Power Consumption

Power consumption isn’t the only area where we found that SaaS is greener than on-premises. Here are a few more considerations.

• Remote IT support. Whether or not your IT support is in-house, they’re going to consume energy traveling to and from an office to perform maintenance and fix problems. Since there really isn’t much of anything to maintain at the office, SaaS vendors are able to provide remote IT support, reducing travel and CO2 emissions.
• Less frequent replacement of PCs. Given that SaaS applications just require a web browser on the client machine, you really don’t need a very powerful PC. SaaS customers can keep their old machines in place or get a longer life from any new machines they buy. This compares to on-premises software, where customer will often upgrade hardware to support the computing resource requirements of new client software.
• Telecommuting. Accessing on-premise software remotely is typically slower and more technologically complex than a SaaS application. With SaaS applications accessible from any computer with an Internet connection, employees can work remotely, saving fuel and energy costs in the process.