Motivated by increased concern over energy consumption in modern data centers, we propose a new, distributed computing platform called Nano Data Centers (NaDa). NaDa uses ISP-controlled home gateways to provide computing and storage services and adopts a managed peer-to-peer model to form a distributed data center infrastructure. To evaluate the potential for energy savings in NaDa platform we pick Video-on-Demand (VoD) services. We develop an energy consumption model for VoD in traditional and in NaDa data centers and evaluate this model using a large set of empirical VoD access data. We find that even under the most pessimistic scenarios, NaDa saves at least 20% to 30% of the energy compared to traditional data centers. These savings stem from energypreserving properties inherent to NaDa such as the reuse of already committed baseline power on underutilized gateways, the avoidance of cooling costs, and the reduction of network energy consumption as a result of demand and service co-...