Defense sees $680 million in annual savings from data center consolidation

Consolidating myriad data centers could save the Defense Department as much as $680 million a year by 2015, the Pentagon said in a recent report.

The effort is part of a governmentwide data center consolidation that will save $5 billion by 2015, federal Chief Information Officer Steven VanRoekel predicted in October.

Defense will realize more than $1 billion a year in savings by 2016 from an overall information technology efficiency program, "of which data center consolidation is a significant part," said the report, released Wednesday by Defense CIO Teri Takai.

These preliminary cost savings estimates have not been validated by the Defense comptroller and do not include the initial costs for consolidation, such as capital investment, application migration and new software. Lack of a final budget has delayed development of data center consolidation plans for 2012, according to the report.

"Funding is a major risk factor to data center consolidation. Although significant savings are expected in future years, those savings cannot be borrowed to fund required investments for consolidating data centers," the report said.

The department was set to have shuttered 55 data centers by the end of September, the report said, three more than initially were slated for closure in fiscal 2011.

Defense plans to reap additional savings by consolidating its software and hardware purchases, the report disclosed. Widely used commercial software will be purchased through the decade-old Defense Enterprise Software Initiative, managed by the Navy, which will combine software licenses held by the four services and new Defensewide licenses based on "advantageous pricing" for the department as a whole, the report said.

In addition, Defense plans to aggregate purchases of desktop and laptop computers, servers, monitors and printers to gain similar economies of scale through large contracts managed by the Army, Air Force and Marine Corps.

The Defense Information Systems Agency has emerged as the first choice for data and application hosting for the Air Force, Army and the Defense Logistics Agency, according to the report.

The Army plans to close 185 data centers, though the services will maintain a limited but unspecified number of data centers to support local installations.

The Navy plans to slash the number of data centers it operates by 50 percent by 2015, the report said. The service in July barred all new investments in data centers.

The Marine Corps will achieve economies of scale by hosting enterprise services and applications new Kansas City, Mo.-based central data center that opened this summer.

While the report detailed that data center consolidation will be an in-house Defense project -- with DISA as the first choice for application hosting -- it added that the Pentagon will consider all options to save money, including commercial data centers.