Will agencies maintain early momentum of data center consolidation?

Challenges lurk beyond agencies' hot start toward meeting data center consolidation goal

With the announcement in December 2010 of the Obama administration’s 25-point plan to reform government IT, data center consolidation has become a defined goal of federal government. That won’t be news to many agencies, but with aggressive targets now set, the question is how to get there.

Nine months after the administration announced the Federal Data Center Consolidation Initiative (FDCCI), Federal CIO Vivek Kundra put hard numbers on the task: Federal data centers have to be cut by some 40 percent by 2015. The total number of government data centers was finally assessed at just shy of 2,100, nearly double the number that were thought to exist earlier in 2010, which means a minimum of 800 data centers have to be slashed.

Agencies will make a first down payment on the plan by closing 137 data centers by the end of 2011.

"We want to move forward very, very aggressively to make sure that assets that are not being utilized are not wasting taxpayer money on them," Kundra told a Senate Homeland Security and Governmental Affairs Committee panel at a hearing in April.

There are few precise numbers on how much money can be saved by closing the government data centers, though the Environmental Protection Agency figures the electricity costs alone to power federal data centers comes to $450 million a year.

In addition to energy, other operational and maintenance costs are involved in running a highly redundant IT infrastructure, with average agency server utilization pegged at just 27 percent by Kundra.

Kundra believes the direct savings from data center consolidation could be at least $3 billion. But the General Services Administration noted in a March report that a council of chief executives of technical industry companies had estimated that, when everything is taken into account, the government could save between $150 billion and $200 billion during the next decade.

The consolidation effort has at least begun enthusiastically. By late June, agencies reported closure of around 40 of the 137 slated to shut down during 2011.

“The good thing is that there is definitely a buy-in across the agencies that this is something that’s needed and that there will be a significant payoff in doing it,” said Angie Petty, a principal analyst for market research firm Input’s Industry Analysis team, who has followed FDCCI from the beginning. “But the fear is that these [2011 closures] will be the quick wins, and what will happen later when the consolidations are not so easy to do?”

Agencies will probably meet the consolidation targets for 2011 because those involve the low-hanging fruit, said Massimiliano Claps, research director at Gartner Government Research. And he agreed that the following years could prove difficult.

“The evidence for that is if you look at the list of initiatives that [government has] put forward for the cloud-first policy,” he said. “Most of them are for low-hanging fruit such as e-mail, but very little else. They are trying to tick the compliance boxes instead of going deeper into real transformation.”

Under the Obama administration’s cloud-first policy, which is also a part of the 25-point government IT reform plan, agencies are required to consider using cloud-based services to deliver IT applications to users, unless they can show that wouldn’t be cost effective or would harm the agency’s ability to carry out its mission.

It’s at these early stages of the consolidation effort that technologies such as visualization can be most effective, particularly given that average server utilization is so low in data centers right now. As servers become faster and faster, said Jim Smid, data center practice director at Iron Bow Technologies, you can get very high utilization on each server with virtualization.

“It’s certainly not the only thing to consider with consolidation, but it is one of the easiest to address,” he said. “And the maturity of that model is not even questioned now.”

In a 2010 report, CDW Government said that of the 600 federal, state and local IT managers it surveyed, 77 percent said they were employing some form of virtualization, and of those, the vast majority were getting some benefit from it.

As consolidation moves forward, however, Claps sees two risks to government: First, that agencies will simply look at the short-term needs and put the emphasis on simple, physical consolidation of servers. That will lessen the long-term value of the process, he said, which resides in such things as logical consolidation of applications, improving data center management, better demand management and aligning the consolidation with such things as the move to cloud-based services.

Another risk is that agencies will run into political and turf problems. One of the points of the administration’s reform plan, for example, is to create a government-wide marketplace to better utilize spare capacity within operational data centers. Large agencies such as the Defense, Agriculture and Interior departments and NASA have already set up their own shared service centers to allow them to provide spare capacity to their own and other agencies, Claps said, and they will likely resist further consolidation.

All of that can only be solved through governance, Claps said, and although he feels top-down leadership from the Office of Management and Budget and others is not always sufficient, it is extremely important. In this case, OMB’s Kundra has probably been the main change agent for consolidation, the use of virtualization and such IT transformation as cloud computing.

The fact that Kundra announced in June that he was leaving government to take a position at Harvard University in the fall therefore throws even more uncertainty into the mix.

“There is a definite view that such things as data center consolidation needs a champion at that level,” Petty said. “It also needs people at the agency level, but it definitely needs this high-level champion, and without that person to push the issues, the momentum could stall, given all of the other challenges agencies face.”

All eyes now are on who his replacement will be, how soon he or she will arrive, and if his or her priorities will be the same as Kundra’s.

“My gut feeling is that there will be a slowing in the number of data center closures after this year and that it will get more difficult for leadership to drive this forward,” Petty said.

About this Report

This special report was commissioned by the Content Solutions unit, an independent editorial arm of 1105 Government Information Group. Specific topics are chosen in response to interest from the vendor community; however, sponsors are not guaranteed content contribution or review of content before publication. For more information about 1105 Government Information Group Content Solutions, please email us at [email protected]