Apple generally makes good decisions. Its decision to pivot to services and subscriptions means that around 40% of its gross revenues after costs in the last quarter were generated by those two buckets of revenue. But that’s not the only smart decision the company has made of late; the decision to migrate its entire business to renewable energy is equally far sighted.
Here’s why that matters.
Services = Servers + electricity
Apple’s services live in the cloud. And because they’re cloud based, they use energy — lots of it. Now, I’ve glanced though the company’s environmental reports and I’m not 100% clear just how much energy those services use. But it’s not inconsequential.
At the same time, the company has been using 100% renewable electricity at offices, retail stores, and data centers since 2018, and now it is attempting to switch suppliers to renewables.
That’s not just greenwashing, you know. It’s an essential step that every business needs to take, as the cold hard truths (particularly in context of war in Ukraine) is that energy:
What’s happening now
In West London, the proliferation of data centers means developers cannot build new properties because the grid is operating at full capacity. In the Wstelijk Havengebied region of Amsterdam, no new businesses can be put in place because of the energy demands of a 100MW data center being built there.
That’s not just a problem for property developers, new businesses, and data centers — it’s also a problem that will put limits on the evolution of electronic vehicles. After all, to replace every car with battery-powered equivalents we’d need to deploy thousands of GW of new electricity production, not to mention making big improvements to electricity supply grids to carry all that load. (And we’ve looked at the scarcity of charge points before.)
This challenge is intensifying.
The move to remote, hybrid work means enterprise users are expanding their reliance on various forms of hosted and on-prem cloud services. Those SaaS services need electricity to run. That’s driving a rapid proliferation of data centers worldwide, and while Apple attempts to run its enterprise on renewable energy, not every operator does — and even renewable energy is questionable once you make use of Carbon Offset Credits.
Even if you pay to plant trees somewhere, you’re still pulling electricity off the grid (though it is helpful that many of Apple’s data centers are based close to Apple-supported renewable energy sources).
Where does your business get its energy?
What does this mean? To me, it means that Apple should be applauded for seeing this problem coming and beginning to take steps to meet it early on.
That’s great, but the inconvenient fact is that not every company has taken similar action, which means that for every solar or wind-powered Apple data center you’ll probably find several more that rely on old-fashioned electricity supply.
It shows that a laissez-faire approach to energy production and consumption, particularly in the context of limited supplies and the fast proliferation of data-driven services essential to enterprise (and thus the economic health of the nation), needs to be organized at a national and trans-national level.
This was always going to happen in the computer world. We always knew computers used electricity, and while manufacturers continue (well, Apple continues) to explore ways to render more performance per watt than, it shouldn’t be a surprise to consider that at some point we’d hit an energy supply wall. And that seems to be what is slowly happening.
[Also read: Why you should pay more attention to Apple’s green slide]
What happens next?
Controversially, we need to look to China for some sense of this. Faced with huge demand for energy and big problems around industrial pollution, that nation has been on course to deploy alternative energy sources for years. It has achieved a great deal, pollution is down, and it continues to make more use of wind, solar, hydro, and other energy production technologies.
That’s something we must see in other nations, as the costs and consequences of fossil fuel-based energy dependency are being rapidly demonstrated in Europe and worldwide. It may seem like a simplistic analysis, but the next wave of innovation must surely be in the creation of dependable, renewable energy. Because, unless that challenge is convincingly resolved, the eternal rollout of technology is going to hit a wall.
Once again, Apple’s astute management saw this coming. Now other enterprises need to raise their game. Because digital transformation is nothing without energy supply.
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