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Report: Data center consolidation faces major time, money hurdles

Federal agencies are likely to have a hard time executing their required plans for downsizing costly data centers, due to financial constraints and aggressive deadlines, a new study by market research firm INPUT finds.

Departments this fall are starting to follow recently developed roadmaps for shrinking server farms, which federal Chief Information Officer Vivek Kundra mandated as part of a February consolidation policy. The aim is to reduce information technology costs, lower energy consumption, take up less real estate, bolster security for information technology and expand the use of cloud computing -- the practice of outsourcing IT needs to third-party companies that deliver services such as help desk functions over the Internet.

But a "lack of funding and adequate planning time and resources" for the initiative "present major obstacles to it being the massive, game-changing program that it is intended to be," INPUT researchers wrote in their report, which was released on Monday. "Data center consolidation is likely to take years, possibly a decade."

INPUT's findings are based on 2009 and 2010 inventories of data centers, the limited number of fiscal 2011 federal IT budget documents and the firm's estimates of more comprehensive IT spending figures. INPUT also conducted interviews with 33 CIO office executives and data center managers, from departments such as Commerce, Defense, Homeland Security and Interior, as well as the General Services Administration.

Nearly two-thirds of government officials surveyed said a lack of upfront funding is the major obstacle to consolidation at their agencies. "Unfunded mandates have been cited as the downfall of [a Clinton administration] 1995 federal data center consolidation initiative, and this time around the White House has again failed to set aside additional funding for data center consolidation efforts," the report noted.

The authors added that Senate appropriators in July slashed funding for the account that supports data center restructuring because they felt the Obama administration's consolidation agenda was too vague. Kundra's strategy required each agency to take an inventory of its data repositories, develop a plan by September for combining them and then monitor results quarterly.

The upshot of the financial constraints is agencies likely will take small steps, such as consolidating minor centers and boosting the efficiency of existing rooms, rather than combining large data centers, the INPUT assessment found. Participating officials said after the transition is complete, they expect to save only about 5 percent to 10 percent of the money they currently spend on energy, personnel or maintenance.

While some departments intend to pay for the effort with money allocated for technology upgrades, INPUT researchers said those funds will not cover the cost of large migrations and real estate. Infrastructure spending during implementation is likely to "spike to as much as 36 percent, or $36 billion in fiscal 2012" as agencies invest in cloud computing, virtualization -- the technique of powering multiple operating systems off one server -- and other supporting technologies.

In addition to financial constraints, the Office of Management and Budget's deadlines for agencies to produce inventories and plans might have been unrealistic, the researchers wrote. "Agencies face obstacles from facility lease agreements, contractual obligations, personnel and facility limitations that take time to analyze and resolve," the report stated. Between 1998 and 2009, the tally of federal processing centers jumped 155 percent from 432 to more than 1,100, as agencies' demands for Internet connectivity, computing power and storage grew, according to OMB.

The INPUT report noted several well-intentioned ideas that did not produce timely reconfigurations. For instance, the Clinton administration tried an approach similar to OMB's in 1995, when there were only 200 federal data centers. The goal was to bring down that number to about 50 within three years. But tight budgets and technical challenges, such as incompatible hardware and software, tripped up the plan to link systems.

A more recent example is NASA's trouble matching a proposed redesign with mission needs. Officials in February halted a planned solicitation for bids on a consolidation project worth an estimated $1.5 billion because the strategy they had in mind did not meet energy-efficiency and cloud computing needs.

Yet, some agencies, such as the Defense Information Systems Agency, have successfully completed consolidations or are well on their way, the study found. Kundra said during a CIO Council meeting on Monday that DISA started combining data centers in 1990 and by 2002, "reduced the department's 194 data centers to five, resulting in a reduction of annual operating budgets from more than $1 billion to $263 million."

In addition, the Homeland Security Department is in the midst of merging 24 centers into two. The department has moved five so far, and anticipates finishing the rest by 2014, according to INPUT. Homeland Security CIO Richard Spires co-chairs the governmentwide consolidation initiative.

White House officials on Tuesday said the INPUT report is not news because rearranging computing environments is a long-term effort.

"The consolidation of data centers is a major, multi-year undertaking that is one of numerous initiatives we are taking to boost efficiency, save taxpayer dollars, and make government more accountable to the American people," said Moira Mack, an OMB spokeswoman. "Already, we have implemented a zero-growth policy on federal data centers, we are working with agencies to review their plans, and we are on track to meet the president's objective to consolidate and significantly reduce the number of data centers within five years."

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