Server Consolidation Hires, Then Fires

Whatever the outcome of the White House's initiative to consolidate costly federal data centers, the transition presents a dilemma for contract employees. They stand to gain business by aggregating servers, and, then lose a substantial amount of maintenance and support work once systems are combined or outsourced. This is one finding in a new report by market research firm Input on the challenges facing the administration's effort to downsize server farms in five years.

Obstacles such as inadequate funding and poor planning could push back the timeline for consolidation to 10 years, states the study, which came out on Monday. White House officials responded they are on track to generate results sooner because they already have capped data center expansion and now are meeting with agencies to review their reconfiguration strategies.

For the time being, vendors aim to reap profits by joining with other companies to offer consolidation tools. Virtualization firm VMware has partnered with Cisco, EMC and Intel, while competitor Microsoft is also forming collaborations to market converged-infrastructure products.

Input predicts the federal market for virtualization -- the practice of running multiple operating systems on one server -- will increase from $835 million to $1.6 billion between fiscal 2010 and fiscal 2015, while the federal cloud computing market will soar from $419 million to $1.4 billion. Cloud computing is a method of purchasing IT on a subscription basis from third-party companies that deliver services such as help desk functions over the Internet.

The Input researchers note:

Data center consolidation is a double-edged sword for contractors; agencies will need contractor support to implement consolidation strategies, however increased efficiency could bring a drawdown of contractor support. As agencies make progress with data center consolidation, the federal employee-to-contractor split may shift after consolidation.