Server and storage virtualization projects IBM has done in its data centers in 2011 has resulted in an energy-use reduction of more than 142,000MWh that year, saving the company about US$16.5m. These figures are from the 2011 corporate sustainability report IBM released Monday.

The company views system virtualization and cloud computing as major parts of its efforts to reduce its impact on the environment. Over the past three years, IBM has virtualized more than 90,000 applications in data centers it either owns or leases.

Virtualization has boosted utilization rates of the company’s data center assets. Energy savings these efforts have generated in 2011 trump energy savings achieved by upgrades to the physical data center infrastructure IBM has done that year.

The company completed more than 200 energy-efficiency upgrades at 86 of its data center locations, reducing those facilities’ energy use by more than 33,700MWh and saving about $3.8m on energy bills as a result. Upgrades included blocking cable and rack openings, rebalancing air flow and shutting down, upgrading and re-provisioning air flow from computer room air conditioning (CRAC) units.

Over the course of 2010 and 2011, IBM expanded its cloud-computing programs, which further helps adjust its data center power consumption. The company’s globally integrated cloud-delivery network currently consists of data centers in New Zealand, Singapore, Germany, Canada and the US.

The cloud and virtualization activities and physical-layer efficiency upgrades at IBM’s data centers are only a part of the company’s larger energy-conservation effort. Together, these projects achieved an energy-use reduction of 378,000MWh in 2011, according to the report.

Wayne Balta, VP of environmental affairs and product safety at IBM, said the company’s philosophy was that sustainability was an imperative not only because it was good for the environment but also because it was good for the bottom line.

“From the impact of our operations and products on the environment, to how we manage our global supply chain, environmental leadership is a strategic imperative, backed by the conviction that good environmental management makes good business sense,” Balta said.