How do you close 1,200 data centers and still experience no savings? It’s easy if you’re the federal government: the White House Office of Management and Budget is unable to account for savings from its recent IT consolidation efforts.
This was supposed to be the year of the government’s big Digital Government Strategy and drive to cloud computing: agencies were supposed to focus on being more information-centric and less document-centric, while moving as much as possible to the cloud.
To do that, the government set out to reduce its number of data centers. Some 432 Federal data centers in 1998 had expanded to more than 3,000 facilities in recent years. In 2006, total federal data center power consumption was 6 billion kWh of electricity; four years later the government concluded that, without a major shift, that power bill would exceed 12 billion kWh by 2011.
The feds set out to close 1,253 of its 3,133 data centers by 2015, with the hopes of saving $3 billion per year. How’s that going? Well, according to a GAO report, agencies closed 420 data centers by last December, with plans to close another 548 by December 2015—or 285 closures short of the OMB goal.
That wouldn’t be so bad if it weren’t for the fact that the government can’t account for any savings from those closures. When the government began this consolidation process, it projected the Department of Treasury alone would save up to $300 million in FY 2013 from the closure of 100 data centers.
The reason the OMB isn’t tracking cost savings is because the agency has “not yet determined a consistent and repeatable method for tracking cost savings,” it wrote in a report. The closest thing to any measured savings came from the House Oversight and Government Reform Committee’s panel on Government Operations, which put the savings at a meager $65.3 million (report in PDF).
David Powner, GAO’s director of information technology issues, testified before the House committee that the government would eventually reach its goal of $3 billion per year in savings, just not by 2015: “Until OMB tracks and reports on performance measures such as cost savings, it will be limited in its ability to oversee agencies’ progress against key goals.”
The weaknesses in oversight of the data center consolidation initiatives are due, in part, to OMB not ensuring that assigned responsibilities are being executed. Improved oversight could better position OMB to assess progress against its cost-savings goal and minimize agencies’ risk of not realizing expected cost savings, said Powner.
Another problem is an utter lack of coherent inventory. All 24 federal agencies have reported their inventories to some extent to the GAO. Only three had submitted a complete inventory. The remaining 21 agencies had a number of problems, such as a lack of information on their virtualization efforts, an IT asset inventory, a commodity IT consolidation plan, a line of business service plan, and an IT shared service plan.
Since late 2010, OMB has been pushing agencies to consider cloud computing services as an alternative to operating their own data centers. But the U.S. General Services Administration has certified only two cloud service providers for use by government agencies, according to Steve O’Keeffe, the founder of MeriTalk’s Data Center Exchange and Cloud Computing Exchange, who also testified at the hearings (the report (PDF) is available.)
O’Keeffe was critical of the government’s mishandling of its finances, pointing out a GAO report that listed roughly 622 HR and 777 supply chain systems used within the federal government. Agency CIOs have to realize there is no money and they have to make consolidations that make sense: “If agency CIOs can’t rationalize applications, then there’s no money to consolidate–which means there will be no cost savings. Something needs to give.”