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GAO Offers Data Center Consolidation Update

May 23, 2017

The federal government’s move to digitize content and make it available online has created the need for more and more compute, security, and storage resources over time. And that has led to data center sprawl.

So, as is happening in some areas of the private sector, the federal government has been working to consolidate its data centers and just generally optimize its IT resources by leveraging new technology. While some progress has been made on this front, it’s not all smooth sailing, and so far the cost savings have been less than expected, according to the U.S. Government Accountability Office’s (GAO) report on data center optimization published this month.

The government recognized the need to work toward more efficient government IT several years ago, when the Office of Management and Budget in 2010 launched the Federal Data Center Consolidation Initiative. Four years later, President Obama signed the Federal Information Technology Acquisition Reform Act into law.

The legislation, co-authored by Darrell Issa (R-CA) and Gerry Connolly (D-VA), is an effort to overhaul how the federal government buys, deploys, and manages information technology. And it calls on the GAO to review agencies’ data center inventories and strategies on an annual basis, among other things.

The Office of Management and Budget’s Federal Chief Information Officer has also launched the Data Center Optimization Initiative. That

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requires agents to develop and report on their data center strategies, optimize their infrastructure, provide quality services for the public good, and transition to more efficient infrastructure such as cloud services and interagency shared services.

The good news is that the May 2017 GAO report indicates the 24 agencies participating in the Office of Management and Budget’s Data Center Optimization Initiative made progress in their data center closure efforts.

As of August 2016, these agencies have identified 9,995 data centers, have closed 4,388 of them, and plan to close all but 10 of the rest of them through fiscal year 2019. (The Departments of Agriculture, Defense, Interior, and Treasury accounted for 84 percent of the completed closures).

Eighteen of the 24 agencies said they saved a total of about $2.3 billion as a result, according to the report. (The Departments of Commerce, Defense, Homeland Security, and Treasury together saved $2 billion of that $2.3 billion). Those savings were from optimization efforts between fiscal year 2012 and August of 2016.

Agency plans call for the closure of about a quarter of the federal government’s tiered data centers and about 66 percent of all the government’s non-tiered data centers by the end of fiscal year 2018. (Tiered data centers have a separate physical space for IT infrastructure, an uninterruptible power supply, a dedicated cooling system or zone, and a backup power generator for prolonged power outages).

And, as of April 2017, 23 of 24 agencies had submitted plans as part of cost savings and avoidance strategies, according to the report.

That’s the good news.

The bad news is that only seven of those plans included all required information.

And, perhaps more importantly, the new GAO notes that “the approximately $2.3 billion in cost savings and avoidances reported to the OMB are about $451 million less than the total amount of achieved cost savings and avoidances that agencies reported to us in November 2015, even thought agencies had nine additional months to accrue additional savings.”

The focus now needs to be on agencies completing their plans to address inconsistencies in their reported savings and to otherwise include all the required information in those plans.

Edited by Alicia Young

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