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Feds Could Save $20 Billion With Better IT Infrastructure Initiatives, Study Finds

Data center consolidation is one way the government could save money on technology.

Data center consolidation is one way the government could save money on technology. // Oleksiy Mark/

Perhaps data center consolidation, virtualization, cloud computing, remote access and infrastructure diversification aren’t the sexiest terms in the federal repertoire, but they do hold the keys to as much as $20 billion in annual savings, according to a study by Meritalk.

The study, underwritten by Brocade, is based on survey results from 300 federal network managers who estimate that if the government were to fully leverage all five initiatives, it could save about 24 percent of the government’s $80 billion information technology budget.

The survey’s results sound promising, but there’s a caveat: Two-thirds of the surveyed network managers reported their networks are ill-equipped to meet current mission needs, and much further away from being able to fully embrace newer tech initiatives like cloud computing. If network managers could magically flip a switch and significantly increase network speed by approximately 26 percent, the survey claims the government could cash in $11 billion in savings in one year. 

“The U.S. federal government has the potential to drive an additional $11.2 billion in annual savings by fully leveraging consolidation, virtualization, cloud computing, remote access, and infrastructure diversification,” said Anthony Robbins, vice president of Brocade’s federal business.  “Agencies should focus on the network to improve capacity, connections, reliability, and security, and consider moving systems and applications to the cloud to generate additional savings.”

Respondents reported more success implementing remote access and data center consolidation in agencies – 70 percent and 62 percent, respectively – than in the other three initiatives. Yet even that statistic is troubling because agencies identify data center consolidation – optimizing core data centers and closing down small ones – as the greatest savings opportunity.

The government is faring much poorer in implementing the other initiatives. Only 15 percent of respondents said their agencies were “fully diversified,” suggesting additional vendor competition for IT acquisitions and maintenance could put cash back in the government’s wallet.

Only 14 percent of agencies have completed virtualization initiatives, according to the study, which signifies many agencies continue to run applications on legacy servers with usage rates as low as 5 percent.  The government only fared worse in its ability to implement cloud computing – only nine percent of respondents reported their agencies have “fully-deployed” cloud computing capabilities – leaving approximately $3 billion on the table.

For all the shiny, buzzword-laden new technologies available, the study illuminates network capabilities as a major hurdle to broader adoption of initiatives like cloud. All these new technologies still have to run on a network of wires and cables, and those networks will have to seriously beef up to maximize cost efficiencies and performance new technology offers.

(Image via Oleksiy Mark/

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