Abstract: “Energy consumption from data centers doubled between 2000 and 2005 from 0.5 percent to 1 percent of world total electricity consumption. That figure, which currently stands at around 1.5 percent, is expected to rise further. The issue of surging worldwide IT-related energy consumption is both a bottom-line concern to the companies involved and, increasingly, an environmental worry. Cloud-computing companies hope to offer a solution by focusing on energy efficiency within massive data centers.In this paper, an attempt is made to study the costs associated with traditional data centers and how cloud data centers provide ways for decreasing the costs while providing areas of opportunity for increasing the energy efficiency.”

Keywords: amortization, energy, cost, virtualization, consolidation.