The Many Layers of Data Center Consolidation

Are agencies ready to make the most of data center consolidations?

As that great philosopher Yogi Berra once said, “It’s déjà vu all over again.” In October 1995, the Office of Management and Budget issued Bulletin 96-02, requesting agencies to close, consolidate, modernize or outsource their data centers to reduce costs and increase efficiency. At that time, the number of federal data centers was 200.

Fast forward to 2010: The federal landscape is dotted with more than 1,100 data centers. OMB again has directed agencies to reduce their data center footprint under the rubric of the Federal Data Center Consolidation Initiative (FDCCI) and incorporate their plans in their fiscal 2012 budget submissions.

The current initiative has something in common with 1995: a collaborative policy approach. But will past be prologue and again demonstrate the limits of the government’s ability to change? Or will emerging technology, budget constraints and other companion forces drive the success of FDCCI?

The benefits of data center consolidation are many. Commercial organizations that have consolidated data center operations have realized substantial cost savings, business process improvements, reduced energy use and a positive environmental impact.

With an emphasis on careful planning and a portfolio approach, the chances for a long-term return on investment from substantial consolidations are very good indeed. Let’s look at where we might find the most potential for achieving substantial ROI.

Many Layers to Savings

One of the most important drivers in reducing the number of data centers is sustainability, a global issue important to the interests of the United States.

Along with decreasing energy requirements, the reduction and collocation of data centers can be of considerable help in lowering greenhouse gas emissions. This is central if agencies are to meet the requirements of Executive Order 13514, “Federal Leadership in Environmental, Energy, and Economic Performance,” as well as other environmental mandates. Various estimates have pegged data center energy use and greenhouse gas emissions at 40 to 100 times greater than that of a typical office building.

Peeling back the onion, inherent in the FDCCI strategy is the centralization and site consolidation of data center operations, including networks, servers and storage.

In the federal government, an opposite trend has been at work. The installed server base is on track to grow 14 percent between 2009 and 2014, according to research firm Input. Over that same period, storage is targeted to grow 7 percent; networks, 6 percent; and desktops, 5 percent. Meanwhile, Input predicts a 30 percent rise in electricity consumption by 2030 and a 50 percent increase in energy costs by 2017.

With spiraling energy costs and a large, looming federal budget deficit, IT budgets will continue to tighten. Consolidation of data centers can ultimately mitigate this economic pressure by reducing the need for storage space and real estate, as well as lowering demands for power and cooling (which account for 60 to 70 percent of the operational costs of a typical data center).

Collocation can also address findings by Gartner that data centers are rapidly running out of adequate power, cooling equipment and space.

Technology Factors

Inside the data center, the advent of high-end computing infrastructures built with blade servers often requires specialized HVAC to dispel increased heat. Blade use, combined with a parallel rising demand for storage and the exponential explosion in the use of mobile devices, has made virtualization an important actor on the FDCCI stage.

Virtualizing operating systems and platforms to fewer servers can increase average server utilization (which hovers at about 21 percent governmentwide, according to October 2009 OMB estimates), reduce floor space and drive energy efficiency.

Reducing the number of applications in use is also essential to maximizing potential benefits. Why? Because this will render the data center less complex and easier to manage. Cabling and configuration needs will be simplified, and data center management will focus more on meeting the needs of clients than on extensive overhead and management demands.

Cloud computing offers another way to reduce the number of data centers. Infrastructure, platforms and software as a service can provide powerful incentives to reduce IT serv­ices, hardware, software and reliance on government-­owned, government-operated data centers. Cloud computing, which is essentially a new version of shared services, can drive a lower total cost of operations and a significant reduction in capital expenditures.

Illustration: Elizabeth Hinshaw
"The collocation of data centers can be central to a strategy of transitioning and modernizing hardware and software, and to streamlining business processes while reducing cost.
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— John Sindelar

Management Incentives

There are indirect and less publicized but equally important benefits of data center consolidation, as well. For example, lowering the number of data centers can reduce the complexities inherent in a multivendor environment, as well as the number of employees needed to service that environment.

Further, the collocation of data centers can be central to a strategy of transitioning and modernizing hardware and software, and to streamlining business processes while reducing cost. Consolidation, for instance, can provide an opportunity to adopt standards such as the latest version of the IT Infrastructure Library, which can significantly improve management practices through better processes for serving and supporting customers.

Overcoming Obstacles

Despite the benefits, experience has demonstrated that consolidating federal data centers using a collaborative policy approach is difficult to accomplish.

First, advances in technology continue to create structural friction related to governance: the traditional vertical, organizational approach versus a horizontal approach through shared services. Perceived issues of mission, performance, accountability and trust often outweigh the maturity that IT offers in the minds of many.

Redundancy in the current data center landscape and the need to reach out and touch the server are only two examples of a governance model that remains rooted in most agencies’ IT management framework.

Governmentwide initiatives that result in real or perceived loss of control require sustained, top-down support. Are we at a tipping point, where IT in the federal environment has matured enough to allow the FDCCI to succeed?

CIOs will need to reach out to the core disciplines of finance, acquisition, human resources and information security for support. They will need the buy-in of their stakeholders, which will hinge on effective communication. They will need to develop strategies that reflect manageable goals and that prioritize functionality first and cost savings second. In execution, they will need to effectively meet transition requirements while meeting their agencies’ current administrative needs. It’s not an easy job, but a necessary one.

Jul 29 2010