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In a recent blog post David Jacobowitz, Google's Program Manager, Green Engineering and Operations, says cloud-hosted gmail is many times more energy efficient than privately hosted corporate email systems. He says:

"We compared Gmail to the traditional enterprise email solutions it’s replaced for more than 4 million businesses. The results were clear: switching to Gmail can be almost 80 times more energy efficient than running in-house email."

You can read the analysis this claim is base on here (PDF). The case study considered energy used by the local clients, the network, and the servers in both Gmail via Google Apps and small, medium, and large corporate email systems.

There are two reasons, Google says, that its cloud is more efficient than your in-house-served email:

  1. Many thousands of emails systems share the virtual servers in Google's cloud. Thus storage and computing cycles can be allocated much more efficiently. Since peaks of use of the different users and systems won't generally overlap, less reserve capacity needs to be kept available per account compared to a single-company system. Also, a small company on Gmail can use only a fraction of a server if that is all it needs, which wouldn't be possible if it had to provide its own.
  2. Google's custom server and power supply hardware, custom software, and sophisticated data center engineering (cooling) make Google's systems among the most energy efficient in the world.

Larger systems (their case considered a firm hosting 10,000 email users) are significantly more energy efficient than small users (the case modeled a 50-user system)--using perhaps one-twentieth as much juice per user. Google just extends this, provisioning millions of users and operating with correspondingly greater efficiency per user.

Here are the results Google calculated:

Business TypeAnnual Energy Per User
Small (50 users)175 kWh
Medium (500 users)28.4 kWh
Large (10,000 users)7.6 kWh
Gmail<2.2 kWh

Thus an email user on a system hosted locally by a small business uses 80 times as much energy per year than a Gmail user. Gmail is 80 times "cooler".

In fact the carbon footprint of Gmail is even smaller than this energy comparison would imply. Since 2007 Google says it has been completely carbon neutral, buying carbon offsets to cover emissions that it hasn't been able to eliminate by efficiency measures or purchase of renewably generated electricity.

The Google post also gives some figures on the energy consumed when you watch a YouTube video.

This article in InformationWeek mentions some of the other issues beyond pure energy economics that are relevant to the cloud vs in-house decision.