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The Stack Archive News Article

Federal data centre optimisation falls $3 billion short

Tue 23 May 2017

Federal data centre

The federal data center optimization plan is in line to fall approximately $3.3 billion dollars short of the estimated $4 billion cost savings projected for the period 2016-2018.

Progress has been made in the Data Center Optimization Initiative, created in 2014 by the Office of Management and Budget (OMB). Over 4,000 data centers have been closed down to date, with resulting in a cost savings of $2.3 billion, and another 5,597 data centers will be closed through 2019. However, the expected cost savings of $656 million is well below initial projections of $4 billion in savings from 2016-2018.

The shortfall, according to a report issued by the Government Accountability Office (GAO), is the result of reporting errors and inconsistencies in reports from different agencies.

24 agencies were required to participate in the Data Center Optimization Initiative (DCOI). Of the 24, only seven included all the information required for a complete report, and one agency has not yet submitted a report at all.

Eight agencies changed the planned cost savings in their annual DCOI strategic plans, adjusting the estimated future cost savings to a lesser amount than reported previously. The GAO also identified inconsistencies in 11 agencies reports of historical cost savings, which affected the numbers significantly, accounting for $1.5 billion of the $3.3 billion discrepancy.

The DCOI grew from a concern that without a coordinated, government-wide effort, data centers would continue to be used in an ineffective, cost-prohibitive manner. A study conducted by the OMB in 2009 showed that the federal government had over 150,000 servers, which were being used at a server utilization rate as low as 5%. The DCOI was established to provide a single set of guidelines to drive data center efficiency across all the different government agencies.

In this way, the OMB hoped to create cost savings as well as “improve the efficiency, performance, and environmental footprint of federal data center activities.”

While the OMB established an overall goal for agencies to close 25% of tiered data centers and 60% of non-tiered data centers by the end of 2018, agencies are reporting closures of only 15% of tiered and 54% of non-tiered data centers. The agencies have reported, however, that they plan to meet the 25/60% goal by the end of the fiscal year 2018.

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