August 15, 2011    /    by

Consolidating Data Centers: The New Normal in Government

Governments across North America are now consolidating data centers at an unprecedented pace. This is not just talk, but real action is (finally) occurring.

Governments across North America are now consolidating data centers at an unprecedented pace. This is not just talk, but real action is (finally) occurring. Welcome to the “new normal” in global technology efficiency, with federal, state, local and even international governments participating.

Want proof that this is happening? Here are a few example articles and some excerpts from each:

  The Canadian Government is closing nearly all of their datacenters.

"Canada’s government announced Thursday, Aug. 4, it will shut down more than 90 percent of its 300 data centers, leaving the nation with fewer than 20 when the plan is complete.

In addition, Canada’s government will make the move away from 100 different e-mail platforms to one all-encompassing system. Furthermore, all resources associated with the delivery of e-mail, data center and network services are being transferred from 44 departments and agencies to a new entity called Shared Services Canada."

The U.S. Department of Defense (DoD) is moving aggressively to close data centers right now.

"As part of broader Defense Department plans to streamline IT operations and meet mandated efficiency requirements, 44 military data centers will be closed by the end of the fiscal year, according to DOD CIO Teri Takai.

'As we look to improve efficiency, one of our ongoing targets is the management and use of data centers. We have closed eight data centers since the IT Reform plan was published, and we intend to close another 44 by the end of FY2011,' Takai wrote in a blog poston cio.gov. 'DOD remains committed to identifying candidates for data center closure and consolidation in support of the [defense secretary’s] efficiency efforts and the IT Reform plan goal of closing 800 federal data centers by 2015.'”

Other federal agencies are closing data centers. The federal overall opportunity for savings may be as high as $18.8 billion.

"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 year."

Minnesota and other states are consolidating data centers.  

"In a joint press release of the Minnesota Office of Enterprise Technology and Minnesota Management and Budget agency, the state announced that it is seeking to reduce its current data center count from 36 to only 2 to 4 within five years."

Local governments are even getting involved with New York and San Francisco consolidating their services. In the specific case of New York City:

"A new 18,000 square-foot data center in downtown Brooklyn opened Monday, which is designed to consolidate the technology infrastructure of 19 agencies over the next year and that of more than 40 agencies over the next five years….

The new consolidated data center will cost the city $11.7 million in equipment fees and another $2.7 million a year to lease the space at the MetroTech Center, but will ultimately help the city save about $100 million over the five-year period alone."

Why are they consolidating?

First of all, closing data centers clearly saves dollars. “The Obama administration expects to save $3 billion over the next four years by consolidating 800 data centers, including 137 this year.”

Second, consolidating data centers can improve security and agility:

"The simple fact is, cloud computing and datacenter consolidation, when implemented smartly and with a detailed plan in mind, can make your data and services MORE SECURE than your traditional datacenter environment can.

In addition to the cost savings, agility, flexibility, transparency and other benefits that cloud services and datacenter consolidation bring to the federal government, they can help to make federal agencies more secure."

Third, this trend paves the way for cloud computing. As EMC says here, you can streamline your infrastructure through consolidation and prepare for virtualized data centers and private cloud computing. I agree, and also add that hybrid and public cloud use are certainly next for most of us.

Are there any downsides to closing datacenters?

There are several sources that say consolidating data centers introduces more complexity. Others find it difficult to quantify savings because they can’t fully measure current costs, or they struggle to come to grips with an overall loss of jobs.  Some colleagues mention that various states have struggled in data center consolidation. Still, this “boat” has now officially left the dock. Government IT executives need to embrace this critical opportunity.

In Michigan, we have seen huge benefits to the consolidation of data centers over the past decade. We have closed 37 datacenters and moved to three core data centers for daily operations. We also back each other up across a government-owned fiber infrastructure that connects buildings in Lansing area.  We have used this success as a launching pad to wider IT consolidation efforts.

Utah is another state to look at regarding data center consolidation. They have an excellent technology management story to tell across all business areas, and their consolidated government portal has also won many awards.

In conclusion, you can see a nice executive summary on data center consolidation in the states from this Center for Digital Government Issue Brief. Another excellent summary is available from the federal General Account Office (GAO-11-565) which summarizes a number of government initiatives. The report is entitled: Data Center Consolidation: Agencies Need to Complete Inventories and Plans to Achieve Expected Savings.

The National Association of State CIOs (NASCIO) sponsored a survey on data center consolidation back in 2007 which is still worth reviewing for context. You can download Survey on Enterprise Data Center Consolidation in the States: Strategies and Business Justification or visit a more recent overview from Deltek/Input which covers the same state/local consolidation topic in 2011. There are also plenty of other excellent technology-related research publications to review at the NASCIO website as well.

 Data center consolidation has become the new normal across the globe. All governments have an opportunity to do more in this area.  I urge readers to "get in the game," if they haven't done so already.