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Energy Department plans alternative funding model for data center consolidation

Facing uncertainty about future congressional appropriations, the Energy Department is turning to alternative models to fund its part of the governmentwide data center consolidation initiative, including Energy Performance Contacting.

The contracting vehicle allows agencies to update and remodel federal buildings without any upfront investment. Under an EPC, a contractor guarantees an agency will save a certain amount of money through reduced energy costs after a construction project is completed. When the project is done, the agency continues to pay its old energy costs for a contractually set period with the difference between the old and new costs going to the contractor.

With a mix of appropriated funding and alternative funding, the department is on track to meet its goal of closing six data centers through consolidation by 2015, Energy said in a report released Friday. The department didn't estimate savings from those closures.

The government aims to close or consolidate nearly 1,000 of its roughly 2,800 data centers by 2015, a program that federal Chief Information Officer Steven VanRoekel said will save the government $5 billion.

Agencies' consolidation progress reports were due Friday.

Several agencies missed the deadline, though, including the Defense Department, which owns roughly one-third of all federal data centers, and four other major data center owners, the State, Veterans Affairs, Homeland Security and Health and Human Services departments.

VanRoekel recently expanded the definition of what constitutes a data center under the consolidation plan, making it difficult to determine the proportion of federal data centers owned by different agencies under the revised definition. Agencies whose plans have yet to be released likely make up half or more of the government's data center footprint, though.

Among agencies that did release their plans Friday, the majority seem to be on target for VanRoekel's goal of closing 472 data centers by the end of 2012 and at least 962 by the end of 2015.

The Agriculture Department, for example, is on track to go from 95 to four data centers and 20 server rooms by 2015, eliminating about 65,000 square feet of server space, according to its report. The department expects to reduce its annual operation costs by 23 percent by 2015, from $164 million down to $126 million and to save $75 million over five years after consolidation costs are factored in, the report said.

VanRoekel's redefinition of what constitutes a federal data center, revealed in a conference call with reporters Thursday, will drastically redefine the consolidation initiative's scope.

The initiative previously applied only to rooms that measured at least 500 square feet and were primarily devoted to data storage. The new definition is aimed at sweeping up the administration's entire information technology infrastructure down to small server closets.

Under the new definition there are roughly 2,800 federal data centers compared with about 2,100 under the previous definition.

The government's data center consolidation initiative is part of a slate of IT reforms developed by VanRoekel's predecessor, Vivek Kundra. Those reforms include more intense oversight of IT building projects; creating an established career path for IT program managers; and transferring large amounts of federal data to cheaper and more nimble cloud storage, which officials expect will save the government $5 billion annually after 2015.

Lower level IT managers have expressed skepticism that many of the reform plan's most ambitious goals are achievable.

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