Businesses should demand a tax break for cloud computing
The government subsidizes green tech through tax breaks, so why not the energy-efficient cloud, too?
Follow @DavidLinthicumTax breaks for businesses are typically provided by government to promote a specific type of behavior, such as moving a plant to a part of the country where jobs are fewer or promoting a particularly good or service over another. Lately, it's been about promoting energy efficiency or being green.
Indeed, the U.S. Department of Energy lists a number of tax breaks that the feds will give you for using energy-efficient technology. Also, the Energy Star program points out other tax credits for green technology, including geothermal heat pumps, solar panels, solar water heaters, small wind energy systems, and fuel cells. Moreover, in the strictly business side of things there are tax credits for energy-efficient commercial buildings.
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There are already tax incentives for using some types of computing technology. For instance, Wikibon Energy Labs lets storage vendors verify the energy savings of certain products, making them eligible for utility rebates from PG&E.
If we're providing tax credits for energy-efficient technology, then logically those using cloud computing should receive a tax break. This tax break should be pretty big, relatively to the benefit and the current tax breaks provided. Follow me here.
What's different here is the huge "green effect" of cloud computing, typically well beyond any of the "traditional" green technology out there, such as hybrid cars and sealed windows. In a recent study (PDF) sponsored by SaaS provider NetSuite, it was clear that cloud computing has an obvious green impact that's easy to account for. Even keeping in mind the bias of the vendor sponsoring the study, the data points seems logical.
