Hug a Tree -- Not a Server 
As businesses grow, so do their data requirements, resulting in an ever-growing, complex network of servers that consume valuable floor space, create excessive power and cooling demands, and are costly and difficult to manage. That coupled with the fact that companies are facing extreme expense pressures related to these IT expenditures, including budget reductions – do more with less, and increasing facility and utility costs. However, we don't always stop to think what it costs to operate a "small" server that typically consumes 500 watts of power. You don’t just pay to power your server, you also pay to cool it back down.
The cost to do that varies as some cooling systems are more efficient than others, but in most cases a good estimate is to just double the power numbers required to run the equipment. That means that it uses 1 watt of electricity to cool each watt of operating power. This translates into 1,000 watts of power required to run just one small 500 watt server.
Electricity is sold by the Kilowatt hour. For example, 1,000 watts translates into 1 Kilowatt (1KW). If your server takes 1,000 watts, and you run that server for one hour, it has used 1KW/h. The average cost for electricity in the United States is 12.6 cents per KW/h. So to run that server for one hour would cost you $0.126.
A single kilowatt does not sound like much until you factor in that it is consumed continuously (the proverbial 7/24/365), which adds up to 8,760 kWh per year! At 12.6 cents per KW/h, 1 KW costs in excess of $1,000 per year.
1KW * 8760 (hours in a year) * .126 (cost per hour) = $1,104 per year
Over a three-year period, that one "small" 500 watt server can cost well over $3,000 just in energy consumption alone. And that's not taking into account the cost of depreciation, allocation of office space, support fees, and personnel resources to maintain the server. Since many of these small servers are purchased for less than $3,000, you can see that the cost to operate a server will quickly exceed the server's price.
But it gets worse. Studies have shown that typical server utilization for most companies is only 5 or 10 percent of their available computing load. In fact, according to an EPA report to Congress, under current efficiency trends, national energy consumption by servers and data centers alone could reach more than 100 billion KW/h by 2011, which, at today’s rates, would represent a $12.6 billion annual electricity expense.
The answer – consolidation.
Bringing together applications, databases, and services onto fewer, highly reliable servers, server consolidation is not just a hot IT trend—it is a necessity. On-demand software (or SaaS) is a way for businesses to have access to the same software applications without the high infrastructure costs and energy consumption. SaaS applications such as hosted email and remote backup services enable companies to take advantage of data storage in disaster-proof data centers to save energy and money.
The Tier 1 data centers that are used to host SaaS applications are equipped with high-performance, energy-efficient equipment that enable computing resources to be dynamically provisioned and shared to achieve significant economies of scale.
SaaS puts the world’s leading technologies to work for companies for a fraction of the cost required for traditional on-premise structures. According to a study by Triple Tree and the Software and Information Industry Association (SIIA), on-demand software deployments have Total Cost of Ownership (TCO) between five and ten times less than traditional on-premise software.
Migrating to SaaS applications reduces the need to invest in, operate, and maintain on-premise software and hardware, while providing the peace of mind that data is safe and can be quickly and easily restored.
Simply put, SaaS lets you invest more in your mission—less in your infrastructure.