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Report Uncovers $18.8 Billion Federal Data Center Consolidation Savings Opportunity

April 26, 2011 by  

Webmaster ToolboxALEXANDRIA, VA – Federal agencies could save $18.8 billion1 from their data center consolidation efforts, according to a new study from MeriTalk, the government information technology (IT) network. That amount could pay the entire combined IT bill for the Department of Homeland Security, Department of Veterans Affairs, Social Security Administration, Department of Health and Human Services, and the Department of the Interior for a year2.

The “Federal Data Center Consolidation: Measure to Manage Report,” underwritten by NetApp, provides a status update on Federal data center consolidation progress, an outline of the challenges Federal agencies face, and recommendations on the optimal path forward.


While the study reveals vast savings opportunities, Federal agencies lack consistent definitions, metrics, consolidation resources, and budget opportunities to realize the savings. The Office of Management and Budget (OMB) has noted that savings from agency data center consolidation efforts could fund the move to more efficient, innovative IT approaches such as the mandated Cloud First policy3.

Lifting the hood on Federal data center consolidation efforts, the report shows where agencies stand toward meeting the OMB mandate to eliminate 800 data centers, or downsize by approximately 40 percent, by 2015.3 Half (47 percent) of Federal IT decision makers surveyed report their agency has successfully consolidated at least some of their data centers. Consolidation efforts have yielded significant value – to date, agencies have reduced their data center count by 31 percent, realizing 20 percent savings in their IT budget as a result.

“Data center consolidation is yielding immediate cost savings for Federal agencies, but the potential for increased future savings is significant,” said Mark Weber, president of U.S. Public Sector, NetApp. “Utilizing a more flexible and efficient IT infrastructure can enable agencies to consolidate their data centers and meet OMB’s mandate.”

The study finds that Federal agencies are committed to consolidation, 82 percent say they will realize savings from their consolidation efforts. While 41 percent believe they have a clear picture of the costs associated with consolidation, 40 percent of those sure of the costs say they do not have the budget to fund their reduction initiatives. However, considering the impending 2015 deadline, 82 percent of IT decision makers surveyed project they can accomplish data center consolidation in five years – leaving at least some agencies at risk of missing the deadline.

Consistency also remains a barrier. The report finds that, while IT decision makers have consistent data center definitions within their own agencies, there is a lack consistency government-wide. Agencies are using at least three different definitions to qualify data centers. They use the following definitions: any room larger than 1,000 square feet that includes servers (32 percent); any room that is devoted to data processing servers, such as server closets (30 percent); and any room larger than 500 square feet that is dedicated to data processing (16 percent).

Further, while 95 percent of agencies use specific metrics to monitor their data centers and 98 percent have approved sets of criteria to identify consolidation opportunities, there is no consensus on which metrics to use uniformly. Agencies report they are using the following metrics to monitor data centers: 61 percent use a physical server count; 43 percent use the storage capacity utilized; and 41 percent use network bandwidth. However, agencies use the following metrics to identify opportunities for data center optimization: 39 percent use physical server count; 34 percent use annual hardware spending; and 28 percent use total operational/maintenance costs.4

“Consolidation isn’t just a mandate, it’s a necessity,” said Steve O’Keeffe, founder, MeriTalk. “If the path to the Federal cloud is paved with consolidation, then Federal leadership needs to mix the cement with coordination, consistency, and clarity.”

The “Federal Data Center Consolidation Measure to Manage” report is based on an online survey of 152 Federal IT decision makers in March 2011. To download the full study results, please visit www.meritalk.com/measure-to-manage. To find out more about the Federal government’s path to consolidation, register to attend the “Data Center Consolidation on a Dime” event on May 19, 2011 at the Ronald Reagan Building and International Trade Center in Washington, D.C. Register at www.meritalk.com/2011-dcc-on-a-dime.

About MeriTalk
The voice of tomorrow’s government today, MeriTalk is an online community that combines professional networking and thought leadership to drive the government IT community dialogue. Developed as a partnership among the Federal Business Council, Federal Employee Defense Services, Federal Managers Association, GovLoop, National Treasury Employees Union, USO, and WTOP/WFED radio, MeriTalk is a community network. For more information, visit www.meritalk.com.

NetApp and the NetApp logo are trademarks or registered trademarks of NetApp, Inc. in the United States and/or other countries.

1 24 percent of $78.5 billion Federal IT budget, IT Dashboard: http://it.usaspending.gov
2 IT Dashboard, http://it.usaspending.gov
3 “The 25 Point Implementation Plan to Reform Federal Information Technology Management,” http://www.cio.gov/documents/25-Point-Implementation-Plan-to-Reform-Federal%20IT.pdf
4 Survey asked respondents to select all responses that apply

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