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Survey: Government Data Center Consolidation Could Save Billions

A survey of Federal government agencies found that the current plan to cut 800 data centers through consolidation could save $18.8 billion in IT costs annually, enough to fund the governments move to adopt cloud computing.

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The federal government is on the way to save a potential $18.8 billion per year on IT costs by consolidating several hundred data centers, according to a new survey.

According to the survey, which was conducted by MeriTalk, an online community focused on government IT, the federal government could also move ahead considerably on its plans to bring as many services as possible to cloud computing as a result of that consolidation.

However, government agencies are still hampered in their move to consolidate data centers by inconsistent measures of their level of consolidation, MeriTalk said.

The survey was commissioned and underwritten by storage vendor NetApp, but the concepts, questionnaires, survey development, samples, response collecting, tabulating, and analysis were all handled independently by MeriTalk, said Steve O'Keeffe, founder of the organization.

An online survey was taken of 152 Federal IT decision makers, half of whom worked in Federal civilian agencies and half in the Department of Defense or Intelligence agencies, in March of 2011. MeriTalk was looking to measure the progress federal government agencies have made toward their goal of closing 800 data centers by 2015, O'Keeffe said.

The results of the survey come at the same time the Federal government unveiled its list of initial data center closures.

The government on Tuesday unveiled a map of the U.S. showing the 39 data centers it has already closed, and another 98 it expects to close by the end of 2011, making a total of 137 named data centers out of the 800 data centers it hopes to close by 2015.

The consolidation is part of the "25 Point Implementation Plan to Reform Federal Information Technology Management" first unveiled by Vivek Kundra, the U.S. CIO, in December.

Consolidation of those 800 data centers is necessary not only to saving IT spending, but also for finding the funding to move operations to the cloud, O'Keeffe said.

"A lot of money is going into data centers," he said. "We're not going to jump into the cloud for free. But we can fund the move to the cloud with data center consolidation."

According to the MeriTalk survey, 47 percent of respondents said their departments have already consolidated some of their data centers. Of those who have already started consolidating, 72 percent said they started the process prior to 2010, and are already starting to save 20 percent of their total IT budgets.

However, the actual degree of consolidation is subject to interpretation, as federal governments have no standard definition of what a data center really is.

The 800 data centers to be cut are a significant portion of the 2,094 data centers the U.S. Office of Management and Budget says are now supporting federal government operations, O'Keeffe said. However, the OMB only counted 1,100 government data centers a year ago, he said. "The OMB then got more specific, and defined data centers as having 500 square feet or more space," he said.

In the survey, 32 percent of the respondents defined a data center as any room larger than 1,000 square feet and has multiple servers, 30 percent defined it as any room including server closets which are devoted to data processing servers, and 16 percent as any room over 500 square feet which is dedicated to data processing and which meets one of the classifications defined by The Uptime Institute. Another 15 percent said they were not using a consistent definition, while 7 percent said they were unsure.

Next: Across The Board Budget Savings


While 95 percent of respondents said they used specific metrics to monitor their data centers, they disagree on which metrics to use.

Of the respondents, 61 percent used the number of physical servers to quantify their data center consolidation, 43 percent used storage utilization, 41 percent used network bandwidth, 39 percent used annual hardware spending, 38 percent used actual storage capacity, and 35 percent used total operations and maintenance costs.

There also appears to be no consensus in terms of how to identify data center consolidation opportunities. While 98 percent of respondents said their agencies have an approved set of criteria to identify consolidation opportunities, those criteria varied widely.

Physical server count was cited by 39 percent of respondents as a way to identify such opportunities, followed by 34 percent citing annual hardware spending, 28 percent maintenance and operations costs, 26 percent storage utilization, 24 percent annual software spending, 23 percent energy consumption, 22 percent storage capacity, and 20 percent the amount of square feet utilized.

About 41 percent of respondents said their agencies have a clear picture of the costs related to consolidating data centers, while 39 percent said they have estimates. Of those who have a clear picture of those costs, 60 percent said they have the budget needed to meet their data reduction goals by 2015.

The respondents said their agencies can on the average cut 24 percent of their total IT budget by data center consolidation, resulting in a total annual Federal government IT savings of $18.8 billion.

Savings across different budget categories resulting from consolidation are pretty consistent across the board, ranging from 18 percent to 24 percent in terms of budgets allocated to hardware, operations and maintenance, power consumption, storage, software, and real estate budgets, according to the survey.

Mark Weber, president of the U.S. public sector business at NetApp, said he is not surprised to see the broad range of metrics used to measure data center consolidation.

"By definition, metrics are not constant," Weber said. "Ninety-eight percent of the people said they are using metrics. But when you drive down, you see different metrics being used. Like anything in life, you can only see the results on things that can be measured."

Weber said NetApp underwrote the survey because of the importance of both storage and virtualization in terms of driving data center consolidation, despite the fact that consolidation will result in vendors selling less equipment to the government.

"Even though there will be fewer dollars sold, some companies will be the winners," he said. "And NetApp is one of them. This is only the very beginning of what government is doing. No matter what party is in office, there are going to be cuts."

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