Slow Progress on Data Center Consolidation

Just a handful of agencies have accounted for the nearly $2 billion saved by closing Federal data centers through the first five years of the program, according to scorecards distributed by Congress, and that trend is likely to continue.

The Treasury Department, Defense Department, Department of Homeland Security, and Commerce Department saved a combined $1.652 billion through the end of Fiscal 2014 by closing data centers, according to figures submitted by the 24 largest agencies to the Government Accountability Office (GAO) and distributed by the House Government and Oversight Committee.

That represented 83 percent of the combined $1.973 billion in savings through the end of Fiscal 2014.

By the end of Fiscal 2015, agencies saved $2.5 billion through consolidation efforts, according to the GAO, suggesting consolidation has slowed and that few other agencies are making substantial progress in efforts to close their data centers.

At a Nov. 4 hearing on the Federal Information Technology Acquisition Reform Act (FITARA), lawmakers and witnesses said closing data centers represents an important way to reduce the Federal government’s estimated $80 billion in IT spending. FDCCI clearly is back in the spotlight, but data suggest most agencies are not making significant progress in efforts to close data centers.

An updated census of Federal data centers also indicates agencies have more work ahead of them than previously thought. The Federal government’s inventory of data centers has increased to 11,700 – a 20 percent increase over last year’s estimate of 9,600 centers, a figure GAO reported in May 2014.

In testimony before the House information technology subcommittee, David Powner, director of information technology management issues at GAO, said agencies had closed 3,300 data centers to date with another 2,000 scheduled to close.

Those consolidation efforts should result in savings of $8 billion through Fiscal 2017, according to Powner, but he said agencies should work harder to close or consolidate “non-core” data centers to cut costs further.

The top agencies saving money through data center consolidation are Treasury, Defense, Commerce, Homeland Security, and the Department of Transportation, Powner told lawmakers.

Agencies that didn’t fare well based on the Oversight Committee’s criteria–16 received a D or an F–say they are making progress with consolidation and that their progress has led to other benefits.

“EPA has focused not only on consolidation, but also on reducing energy and space consumption through virtualization, hot aisle/cold aisle and airside economizer technology in temperate locations,” said Ann Dunkin, chief information officer at the Environmental Protection Agency, which received an F from the House Oversight committee. “EPA is also moving to the cloud for a number of key applications.”

The Office of Management and Budget (OMB) is expected to provide an updated picture on savings from data center consolidation soon. FITARA requires OMB to report actual savings–and new goals–by agencies as a result of consolidation.

That memo will focus on the importance of closures, but it will also emphasize the importance of optimization.

Despite the slow progress on data center consolidation, Joe Klimavicz, Justice Department chief information officer and chairman of the CIO Council’s FDCCI Task Force, expects agencies to close hundreds of data centers this year as they move forward with consolidation plans.

“Each agency has a different starting point with regards to the number and size of their data centers, and so will have different opportunities to consolidate and reduce operating costs,” Klimavicz said. “Over the last five years, we have closed over 1,600 Federal data centers, increasing efficiency and freeing up funds to be invested in the mission. We anticipate several hundred additional data centers will close in FY 2016.”

Bill Glanz
About Bill Glanz
Bill Glanz is the content director for MeriTalk and its Exchange communities. Over the past 14 years, he has worked as a business reporter, press secretary, and media relations director in Washington, D.C.
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