Big government getting smaller, at least in data centers

The Defense Department hopes to save as much as $680 million by 2015, thanks to data center consolidation.

Like so many big enterprises, the U.S. Department of Defense has been hard at work to consolidate its vast empire of data centers. The effort took on a more aggressive stance under the tutelage of former federal CIO Vivik Kundra, who in 2010 outlined a broad initiative to dramatically reduce IT operations that at the time were distributed among more than 1,100 data centers. The goal has been to slow the sprawl of the government data center footprint and the resulting growth in energy consumption and cost.

The consolidation continues, and early this month the Defense Department released its progress report. You can read the full report here, but I thought I’d share with you some of the highlights.

Among the goals of the various agencies within the Defense Department, the Army expects to close 185 of its data centers, or nearly half, by the end of fiscal year 2015, with further reductions possible. To replace the computing power, the Army plans to purchase enterprise hosting as a managed service, although the Army will maintain a limited number of data centers to support local installations. The Navy seeks reduce by half its data centers, also by 2015, and will focus on virtualizing applications and consolidating servers. The Defense Logistics Agency (DLA) plans to cut its servers by 75 percent and close nearly all its data centers (at least 90 percent of them) by 2015, and the Military Health System target is to reduce the number of data centers by 70 percent over a five-year time frame.

So on to the progress. The Defense Department picked 52 data centers to close this year, and added another seven along the way. Of these, the department reports, the closure of all but four are on schedule.

As for next year, the department says budget resolutions and funding issues have stalled some of the plans, noting that “although significant savings are expected in future years, those savings cannot be borrowed to fund required investments for consolidating data centers. Consolidation requires an investment in labor, new and more efficient hardware, upgrades to computer facilities, and increased operating costs when some legacy systems run in parallel with new systems.”

Perhaps some of the most interesting details are found at the end of the report, when the Defense Department discusses cost savings, albeit with an opener that admits calculating cost savings through data center and server consolidation as a “challenge” (sound familiar?). Nonetheless, the department expects that in the near term its overall efficiencies effort (of which data center consolidation is a big part) will garner savings of more than a billion dollars annually by fiscal year 2016.

Specifically, the Defense Department says it could achieve annual savings of $58 million in energy costs, $511 million in aggregate data center building operational costs, and $111 million in construction costs by fiscal year 2015. Of course, those savings do not include upfront costs needed for consolidation, such as capital investments for new infrastructure, application migration, software and data center infrastructure as well as increased operational costs for more state-of-the-art data centers.

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