New Jersey had six, now it has one. South Carolina has 11, but soon will have just one. Missouri also has slimmed down from six to one. Pennsylvania has a whopping 18, but plans to have just one.
What are these states in such a rush to eliminate? In two words: data centers.
Like the merger mania that has taken over the corporate world, state and local governments are consolidating numerous data centers into just one or two supercomputing facilities. Taking advantage of powerful mainframes
Thomas G. Paese, secretary of administration to the governor of Pennsylvania and F. Donald Wenstrup, assistant to the director of the Pennsylvania Tech Center.
in smaller boxes, high-speed data communications and sophisticated systems-management capabilities, governments are shutting down old centers as fast as they can unplug the aging machines.
The effect of consolidation can be significant. Most governments are projecting multimillion-dollar savings, greater operating efficiency, more opportunities to launch new IT projects and, in some cases, a centralization of independent applications.
"Our government wants to modernize the state of South Carolina, but it doesn't make sense to try and modernize 11 data centers when everyone else in the private sector is consolidating and saving money," said Ted Lightle, director of the state's Office of Information Resources.
South Carolina isn't the only state that finds itself with too many data centers. For the past 15 years, Pennsylvania has allowed the management of information technology to become heavily decentralized. Agencies have built data centers according to their individual constituent needs, resulting in a diverse number of IT architectures. Today, Pennsylvania has
eight agencies using IBM mainframes;
nine agencies using Unisys 2200 or A-Series mainframes;
eight agencies using DEC and/or UNIX;
12 agencies using IBM's midrange systems; and
five agencies using aging minicomputers (Wang, NCR, etc.).
By 1995, Pennsylvania was spending $268 million annually to run its data centers and acquire and deploy information technology. According to Curt Haines, director of the Bureau of Consolidated Computer Services, significant state funds were tied up in operating data centers, many of which were running redundant systems or were too small to achieve any economies of scale. "We look at consolidation not as a cost-saving initiative, but as a cost-redistribution initiative," he said. "We want to free up both cash and staff resources and to redirect them toward new technologies."
In South Carolina, the price and performance improvements in large mainframe computers have driven the state to rev up modernization plans for its IT architecture. The Outsourcing Option
Of all the government data-center consolidation efforts, Pennsylvania's stands out as unique. Last year, the state announced that it was negotiating with Unisys Corp. to consolidate and manage the state's data centers. Prompting this unusual move was an independent study by KPMG Peat Marwick that concluded outsourcing in Pennsylvania would result in greater benefits than in-house consolidation.
The projected benefits include greater cost savings and placing the state's information processing in the hands of competent, experienced professionals whose full-time business is information technology. Outsourcing would also reduce demands on staff resources by 80 percent. Peat Marwick projected savings of $127 million over five years; Unisys believes it can save $140 million during the same period. The contract is expected to cost the state $410 million.
The decision to outsource was not based on cost savings alone, emphasized Curt Haines, director of the Bureau of Consolidated Computer Services. "The most important reason [we are outsourcing] is to free up resources for emerging technologies. We want to free up both cash and staff resources and to redirect them to new opportunities, such as Web services, electronic commerce and knowledge-based applications."
Haines added that outsourcing data-center operations is not unprecedented. Over the past 10 years, a number of major companies, from Kodak to McDonnell Douglas, have