There are numerous benefits inherent with SaaS applications and we have discussed many of them on this blog: anywhere access, low startup costs, automatic upgrades, etc. We've always known that the SaaS apps are more environmentally friendly than on-premise software, but have not taken the time to quantify and prove this.
In September, Chris Thorman of Softwareadvice.com released a study regarding the environmental impact of SaaS applications in his blog post titled, "SaaS v. On-premise Software: Which One is More Green." The post garnered a lot of buzz and sparked a healthy debate on the topic.
Chris used the example of a four person health care company and measured how much energy they would use using on-premise software compared to what their energy consumption would be using SaaS. When using on-premise software, each user would use 2,352 KW of power per year while the SaaS users only used 152.85 KW of power per year.
Because SaaS providers leverage economies of scale, they are able to get more production per KW of power. If you want to learn more about the green benefits of cloud computing, see this video from FICO Tech Talk on greening the grid through cloud computing.