The skyrocketing cost of electricity, combined with a possible impending carbon tax, and corporate pledges for greening IT, may mean that many enterprises ultimately may outsource their entire data centers via a utility computing model in which they only pay for computing resources they actually use. That's the implication of a new report just published in Virtual Strategy Magazine.

The report notes that data centers need to drastically increase their computing power, which means greater density, and far more energy used per square foot. Making matters worse is that electricity costs continue to rise, and will continue to do so.

The title of the report --- "Microsoft and Google: Cloud Computing Dominance Through Renewable Energy" --- makes clear who will be the winners. Both Microsoft and Google are building massive, energy-efficient data centers, and plan to offer cloud computing services to businesses. The services can be as small as providing storage space or server power. Or, they can be as all-encompassing as providing an entire outsourced data center.

Google and Microsoft, the report says, use slightly different ways of building green data centers. Google is buying up huge tracts of land in rural areas, and may use them to build mega data centers powered by renewal energy, such as wind, solar, or geothermal. Microsoft, on the other hand, has been placing data centers on smaller plots in urban areas, and hopes to use existing power lines to buy energy to power them from new, green energy suppliers.

The report concludes that because of the scales involved, Google and Microsoft will be able to provide computing resources at far less cost than can enterprises or competing vendors --- and they can do it far greener as well. The report notes:

users' prevailing need to conserve energy in the data center is actually the foundation for a momentous inflection point in data center computing, whereby the most recognized vendors in computing can build their own data centers and sell IT services at prices far below what it costs most organizations to support, themselves.  Microsoft and Google, in particular, are leveraging the energy conundrum in such a way as to bolster their own individual data center strategies, and they are using their enormous leverage to create formidable barriers to entry that will increasingly make the "build versus buy" decision an easy one.

The report spells out why municipalities will move to the new utility-computing model and outsource their data centers. But then it makes this conclusion:

[Google and Microsoft] appear to be on a mission to leverage their size and influence to become the lowest cost suppliers of data services to commercial businesses, with specific plans still having not been revealed to the public. For those readers who rely upon their corporate data center, listen up:  your world is about to change.