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11,700 and counting … data centers back on the chopping block

The Office of Management and Budget is taking a third bite at the data center reduction apple.

The Government Accountability Office says the number of federal data centers grew to more than 11,700 from more than 9,000 in 2014. And this is up from 2,100 in 2011 and 1,100 in 2009, when OMB first initiated the reduction and optimization effort.

Tony Scott, the federal chief information officer, said he will release a new memo later this winter detailing updated data center consolidation requirements for agencies.

“First, it will clarify and be more specific in terms of what the definition of a data center is. And as you know all too well, there has been some degree of confusion on that in the past, and a lot of emotion around that as well,” Scott said in an exclusive interview with Federal News Radio. “And then, secondly, we will be a lot more specific around agencies setting goals for themselves and OMB will set an overall target across the federal government that will be a refresh of the goals and work that’s already has been done. We intend to spend a little more time in that guidance on the kinds of things we are looking for as agencies do data center rationalization and consolidation as well. So it will include things like leveraging shared services and other points we have made elsewhere as well.”

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The Obama administration first tried to tame data centers in 2009 and 2010, when former federal CIO Vivek Kundra signed two memos requiring agencies to determine how many data centers they had and develop consolidation plans.

The next federal CIO, Steve VanRoekel, updated consolidation targets in 2011 as the number of federal data centers continued to grow. VanRoekel also initiated PortfolioStat sessions in 2012 to focus, in part, on efficiency and effectiveness of data centers, not just straight closures.

Now two years later as agencies continue to discover more and more data centers, Scott is trying to take a balanced approach looking at both consolidation and optimization.

“Some people thought reducing the number of data centers was the most important thing. Others thought reducing the cost was the most important thing. We have examples of both of those in the federal government. We have some agencies that reduced the number, but the cost didn’t go down proportionally. We have other cases where tremendous costs went out, but it was as smaller numeric reduction,” Scott said. “And then there are a number of other things which is the efficiency and utilization of the data centers you have. Everybody who is running data centers has their own sort of value in terms of wanting to run at 80 percent capacity or 90 percent or 50 percent or whatever, so opinions can vary widely on efficiency and effectiveness and numeric values in this particular space. I think what we want to get across as we have this conversation around reducing overall IT costs are what are the levers you have to exercise that can help you reduce costs? One of them is deliberate actions in the data center space.”

He added those deliberate actions could include anything from reducing the number of centers to increasing utilization rates to modernizing servers and upgrading equipment and getting more efficiency that way, to eliminating applications.

“Shifting to cloud services is a great way of eliminating data centers and getting to a smaller footprint,” Scott said. “I think what you will see is a balanced approach to this that encourages multiple swim lanes, if you will, of getting more effective and efficient IT in that area and not just a focus on numeric achievement, although that could be one of the things.”

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The push for reducing the number of data centers to achieve cost savings comes from both GAO and Capitol Hill.

David Powner, GAO’s director of IT management issues, told House lawmakers at the Nov. 4 hearing on the Federal IT Acquisition Reform Act that agencies are missing out on saving more than $5 billion by closing another 2,000 data centers.

“[I]n total, the government plans to close about 5,000 centers and save about $8 billion. Mr. chairman, this $8 billion total actually should be much higher since some agencies have low-balled their targets, and not all have new cost estimates in,” Powner said.

Powner said the OMB guidance and the congressional interest through the FITARA comes at a good time. He said there are certain agencies that need to relook at their data center consolidation plans, and others that might need a push from Congress or OMB to reduce their totals.

Scott said it’s important to focus on the total number of data centers, but finding that balanced approach may, in the end, help agencies find more savings and efficiencies.

At the hearing, several members of Congress asked about incentives for agencies to close data centers and keep some or all of the money saved from the reductions.

Scott said OMB is looking at several options to help agencies keep some or all of the money they save.

“I think there is a spectrum. There are a lot of things that can be done in IT that you don’t need additional funding for,” he said. “You can sometimes pay back in the same year, or realize immediate savings by better contracting or by eliminating applications and just shutting them down. And then there are things you do need funding for because you have to go do the right thing while you’re still maintaining the old thing that is costing you a lot of money. There are cases where application replacement doesn’t happen magically, you need to go build the new thing while still operating and maintaining the old thing. At some point you can turn off the old thing that is expensive and costs a lot and realize the savings. But the payback comes further down the road than it does for other kinds of activities. We have to be clear as an IT community that we identify where we need for funds and for what reasons we need them, and where we are going to go after savings where we don’t need additional funding and we can do things all on our own.”