Federal IT Can Save $18 Billion with Consolidation: Report

 
 
By Chris Preimesberger  |  Posted 2011-04-29
 
 
 

The U.S. Congress and President Obama are at war trying to come to terms on cutting back federal expenses in order to ease the constant strain on the overall trade deficit, last calculated to be $14 trillion.

Well, here's something those politicos should be able to agree upon: saving a cool $18 billion  by virtualizing and consolidating government data centers. It's not a trillion-dollar deal, but it's a legitimate help to the budget without ruffling anybody's feathers.

This $18 billion amount comes from a new study released this week by MeriTalk, the government's own IT network. MeriTalk claims that $18 billion saved could pay the entire IT bill for the departments of Homeland Security, Veterans Affairs, Social Security Administration, Health and Human Services, and the Interior -- for an entire year.

The report, entitled "Federal Data Center Consolidation: Measure to Manage Report," was underwritten by network storage maker NetApp. It offers a status update on federal data center consolidation progress, an outline of the challenges federal agencies face, and recommendations on the optimal path forward.

While the study reveals huge savings opportunities, it also found that federal agencies lack consistent definitions, metrics, consolidation resources, and budget opportunities to capture the savings. The Office of Management and Budget said that savings from agency data center consolidation efforts could fund the move to more efficient IT approaches, such as the newly mandated Cloud First policy.

U.S. CIO Vivek Kundra announced the "Cloud First" policy in December to encourage federal government agencies to cut costs and make IT operations more efficient by deploying cloud applications. Kundra specified that all agencies must move at least one system to a hosted environment in 2011. The Department of Treasury moved its Website to Amazon EC2 early in January.

The MeriTalk report shows where agencies stand toward meeting the OMB mandate to eliminate 800 data centers, or downsize by approximately 40 percent, by 2015. Key findings include:

  • About half (47 percent) of federal IT decision makers surveyed reported that their agency has successfully consolidated at least some of their data centers. Consolidation efforts have yielded significant value; to date, agencies have reduced their data center count by 31 percent, realizing 20 percent savings in their IT budget as a result.
  • 82 percent of federal agencies say they will realize savings from their consolidation efforts.
  • 41 percent believe they have a clear picture of the costs associated with consolidation, but 40 percent of those sure of the costs say they do not have the budget to fund their reduction initiatives.
  • 82 percent of IT decision makers surveyed project they can accomplish data center consolidation in five years.
  • While 95 percent of agencies use specific metrics to monitor their data centers and 98 percent have approved sets of criteria to identify consolidation opportunities, there is no consensus on which metrics to use uniformly. Agencies report they are using the following metrics to monitor data centers: 61 percent use a physical server count; 43 percent use the storage capacity utilized; and 41 percent use network bandwidth.

The "Federal Data Center Consolidation Measure to Manage" report is based on an online survey of 152 federal IT decision makers taken in March 2011. You can download the report here.

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