Federal IT budget savings: cut 800 data centers, save $18.8B

Last year's projected savings of $3 billion may be vast underestimates, if everything works perfectly.

Federal budget cuts and the fight over whether to raise the Federal debt ceiling have forced Congress to cut even the Pentagon to cut as much as $78 billion from its budget, which may kill even relatively popular weapon-systems projects.

That's the kind of atmosphere in which IT usually gets it in the neck.

Fortunately, that already happened and federal CIOs are trying to recover, carrying through on orders to consolidate federal data centers by about 40 percent by closing 800 of them.

The Obama administration ordered the consolidation last June, expecting at the time to save $3 billion by 2015.

According to a new report from MeriTalk – a social network for government IT people – the real savings could be closer to $18.8 billion.

The extra savings would come not only from eliminating facilities, but by making the remaining ones more efficient using cloud computing rather than standalone servers as the default application model.

Federal agencies are already saving 20 percent of their IT budgets, after closing 31 percent of their data centers. Most agencies are making good progress on the 25-point plan outlining the consolidation (PDF) the White House issued in December.

Driven by the plan is designed to hit specific

The plan, being driven by the Federal CIO Council, sets consolidation and cost-saving deadlines in 6-month intervals.

It requires federal agencies to follow a strict project-kill process that will end a third of the projects in the federal IT portfolio within 18 months, swap out the current semi-standard data center design for a standard, modular one.

Many of the federal 152 data-center managers polled for the study are concerned about the ability of both their agencies and others to hit the 2015 deadline, however.

Each agency also uses its own definition of "data center," so even getting a consistent count of the number available to be closed is a problem, let alone integrating the apps and hardware within them.

Measuring savings is difficult because agencies use different metrics to gauge the size of the data center or level of utilization. Some count the number of physical servers, others the amount and utilization of storage capacity, for example.

The most Catch-22 problem is that agencies already struggling with budget cuts and don't have money allocated for the consolidation.

However they define it, 82 percent of the data-center managers surveyed think they can hit the consolidation targets by 2015.

I'm guessing that number will stay about the same until sometime in mid-2014, then drop rapidly as federal data center managers and CIOs either realize or admit that closing 800 data centers without losing any of the work they're supposed to do, is a lot harder than even they thought it would be.

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