outsourced their data centers. In addition, the state forecasts that only 208 state workers will be affected by the contract -- not the 500 originally reported -- and all will be offered training to revitalize their careers. As for the data, Haines said that the state will have proper safeguards in place to protect the state data from outside tampering. Haines' department will manage the contract.

Is Pennsylvania getting out of the computer business? Definitely not, replied Haines. The state is not outsourcing its entire information technology operations, just the 18 data centers the report recommended. The others, mostly smaller DEC systems will be consolidated and run by the state.

"The only thing that didn't make sense was for the state to operate multiple data centers," said Haines. "We will be investing the mainframe savings [from outsourcing] into other IT disciplines. We are not looking to get out of the business of computer operations."

"When I started working for the state in 1982, it cost $4 million for a mainframe with 10 MIPS [millions of instructions per second]," recalled Lightle. "Today, we can purchase mainframes that cost $2,000 per MIPS."

But for some states, there's a more urgent reason for data-center consolidation. Private-sector competition has created an exodus of workers from government IT positions, stripping data centers of some of their most valued workers. With a shrinking staff base, some governments have no choice but to consolidate. "Our challenge is to remain competitive in this marketplace," said Peter Poleto, co-chairman of New York state's data center consolidation program. Poleto, speaking at the Government Technology Conference in Albany, N.Y., last year, explained that the state's highly skilled staff have been strongly sought by a private sector eager for experienced workers to fill their ranks. "Many of our colleagues are leaving for six-figure salaries," he said. "Our only strategy is to consolidate our resources in the face of these market pressures."

More MIPS, Fewer Folks

If staff departures have strained data-center resources for New York, the state has only to look at what Hewlett-Packard has done to remind itself of consolidation's benefits. HP has 300 servers and 10 terabytes of storage at its 28,000-square-foot Atlanta data center, which supports 18,000 workers and 220 field offices. The entire facility is run by a staff of five.

Bottom line: Large-scale data centers are less expensive to run. Lightle figures South Carolina will save $30 million over 10 years and will need 100 fewer people to manage one center instead of 11. Missouri expects to save between $3 million and $5 million annually.

Pennsylvania also plans to cash in on the consolidation bonanza. In what is turning into one of the more unusual approaches to consolidation, the state is outsourcing its data-center operations to Unisys Corp. Under the vendor's proposal, the state could save up to $140 million over five years by turning over operations to the private sector. One reason the state opted to outsource: An in-house proposal for consolidation projected savings of only $13 million for the same period.

The state intends to use the savings to invest in emerging technologies, such as Internet-based applications and electronic commerce, as well as retraining present staff. Some 370 IT staff will be affected by the Unisys agreement.

New York also sees consolidation as the open door to new IT opportunities. Poleto listed data warehousing, Web enablement and three-tier client/server applications as some of the possibilities that will come with consolidation. Another improvement is service quality. "Twenty years ago, 24 [hour], 7 [day] operations didn't happen. Some incident routinely interrupted services," said Poleto. "Today, however, the need for true uninterruptable, redundant and hardened service has become a demand."

Today's consolidated centers also offer better security than in the past. With the proliferation of Web applications that rely on legacy data, as well as the overall importance of information processing in all fields

Tod Newcombe  |  Features Editor