Administration increases data center consolidation savings estimate to $5 billion

The government now expects to save about $5 billion total by closing and consolidating federal data centers, federal Chief Information Officer Steven VanRoekel said Thursday.

That's a significant increase over the Office of Management and Budget's previous estimate of $3 billion in savings from its data center consolidation program by 2015, he said, but because of the lengthened time horizon, it's not an apples-to-apples comparison. VanRoekel did not say how many years out the $5 billion estimate went.

The office estimates $630 million in savings will flow from consolidation initiatives that are currently in the works, he said. VanRoekel was speaking in a conference call with reporters a day before agencies are scheduled to release detailed data center consolidation plans.

"This takes time and capital expenditures," he said. "It will follow a hockey stick sort of path where the number of closures and the amount of savings will start somewhat low to begin with and increase a lot in the future . . . What our model shows is you can actually spend a penny and make a pound on this."

OMB also is expanding its definition of what constitutes a government data center, effectively changing all the goalposts in the governmentwide campaign, VanRoekel said.

The new definition significantly raises the government's estimates for how many data centers it will consolidate, but also raises the total number of data centers the government owns. The goal of the changed definition is to find more savings by taking on the government's total information technology storage infrastructure, not just what's kept in larger facilities, VanRoekel said.

"I basically told the team when I came on board that I wanted to scope it so that everything was in," he said. "We should be looking for efficiencies in everything from wiring closets to these very large data centers across the government."

OMB settled on a common definition of federal data centers in October 2010 as being at least 500 square feet. That was after officials found that varying definitions across agencies could make the number of total data centers increase or decrease by more than half.

Under the old definition, there were about 2,100 federal data centers. The government planned to close or consolidate about 800 of them by 2015 and 373 by 2015.

Under the expanded definition, there are nearly 2,800 federal data centers, VanRoekel said. He expects to close or consolidate 472 of those by 2012 and 962 by 2015. The 2015 goal is likely to increase as consolidation plans gather steam, he said.

VanRoekel did not update the number of data centers OMB has already closed, which stood at 81in July. A CIO spokeswoman said an updated number of closed data centers will be out before the end of the year.

The government's data center consolidation initiative is part of collection of IT reform initiatives developed by VanRoekel's predecessor, Vivek Kundra. Those reforms include rationalizing federal IT procurement; heightening review of IT building projects; and transferring large amounts of federal data to cheaper and more nimble cloud storage, which officials expect will save the government $5 billion annually.

Lower level IT managers have expressed skepticism that the government's data center consolidation plans are achievable. Kundra attributed that skepticism to an entrenched fear of change in government. He often spoke of a long-term plan to consolidate all federal data into "three digital Fort Knoxes."