Mar 22 2016
Data Center

How the Consolidation of the Fed Data Center Saved Billions

Just four agencies — the departments of Commerce, Defense, Homeland Security and the Treasury — account for the vast majority of the savings to date.

The federal government has achieved substantial savings since it started consolidating its data centers in 2010, according to a report from the Government Accountability Office (GAO). However, the government watchdog thinks that the government could save even more than agencies are currently projecting by fiscal year 2019, because some agencies have not yet fully developed their cost-savings goals.

As FedTech reported, agencies have been making steady progress under the Office of Management and Budget’s data center consolidation program, officially known as the Federal Data Center Consolidation Initiative (FDCCI). The goals of the FDCCI include cutting data center hardware, software and operating costs; moving more applications and services to the cloud; promoting energy efficiency in federal IT; and boosting security. The GAO looked at agencies’ closures and evaluated their progress in achieving their goals. The GAO also assessed agencies’ progress against the OMB’s data center optimization targets.

Making Clear Progress

According to the GAO report, as of November 2015, the 24 agencies participating in the FDCCI had identified a total of 10,584 data centers and reported closing 3,125 through fiscal year 2015. The report found that 84 percent of the closings came from just four agencies: the departments of Agriculture, Defense, the Interior and the Treasury. The report states that agencies also plan to shutter an additional 2,078 data centers by the end of fiscal year 2019, bringing the total closed to 5,203.

The report found that the shutdowns at 19 of 24 agencies under the FDCCI produced significant savings for taxpayers, totaling “$2.8 billion in cost savings and avoidances from fiscal years 2011 to 2015.”

Notably, the GAO found that four agencies produce 86 percent of the total savings: the departments of Commerce, Defense, Homeland Security and the Treasury. There are more cost savings ahead, as “21 agencies collectively reported planning an additional $5.4 billion in cost savings and avoidances, for a total of approximately $8.2 billion, through fiscal year 2019,” according to the report.

That figure could, however, be understated; the GAO believes “planned savings may be higher because 10 agencies that reported planned closures from fiscal years 2016 through 2018 have not fully developed their cost savings goals for these fiscal years.”

Some agencies have not done so because they are “in the process of re-evaluating their data center consolidation strategies,” the report said. “Until agencies address their challenges and complete savings goals, the $8.2 billion in total savings may be understated and agencies will not be able to satisfy provisions of” the Federal Information Technology Acquisition Reform Act provisions (FITARA).

The law, passed in 2014, requires agencies to “report to OMB about federal data center inventories and strategies to achieve consolidation, including yearly calculations of investment and cost savings.”

Agencies Have More Work to Do

FITARA requires agencies to “develop yearly calculations of cost savings as part of their multi-year strategies to consolidate and optimize their data centers,” the GAO report noted.

Meanwhile, the GAO found that 22 of the 24 agencies in the FDCCI “made limited progress against the Office of Management and Budget’s (OMB) fiscal year 2015 data center optimization performance metrics, such as the utilization of data center facilities. Two agencies did not have a basis to report on progress.”

In addition, “of the nine metric targets, only one was met by half of the 24 agencies, while the remaining eight were each met by less than half. Agencies reported challenges in meeting OMB’s targets, such as the decentralized nature of some agencies.”

Despite those challenges, the GAO said that “until agencies take action to improve progress against OMB’s metrics, including addressing any challenges identified, they could be hindered in making progress against OMB’s optimization targets.”

The GAO said 10 agencies need to “take action to address challenges in establishing, and to complete, planned data center cost savings and avoidance targets” and that 22 agencies must “take action to improve optimization progress, including addressing any identified challenges.” Fourteen agencies agreed with the GAO's recommendations, four agencies didn’t agree or disagree, and six had no comments.

As FedScoop reported, the GAO report came shortly after the OMB unveiled a new Data Center Optimization Initiative to push more stringent energy-efficiency standards in federal data centers. The new initiative, still in draft form, will supersede the FDCCI, according to an OMB blog post. The plan “requires agencies to develop and report on data center strategies to consolidate inefficient infrastructure, optimize existing facilities, achieve cost savings, and transition to more efficient infrastructure, such as cloud services and inter-agency shared services.”


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