Forman: FDCCI cost savings are 'smoke and mirrors'

Projected cost savings under the Office of Management and Budget's Federal Data Center Consolidation Initiative vary, with OMB estimates ranging from $3 billion to $5 billion and the Government Accountability Office recently predicting $2.4 billion in savings.

But Mark Forman, former administrator for e-government and IT at OMB, said those numbers are "smoke and mirrors" unless federal agencies also "consolidate away the complexity" of client/server applications.

That is where the big savings are in data center consolidation, Forman said, but it is a change he's not sure federal agencies will undertake.

"The only way out here is to re-platform these applications into common operating environments or consolidate applications and leverage economies of scale on similar applications," Forman told FCW. "The opportunities for consolidating are huge, but complexity drives cost, and most of that cost is labor. It's only if applications are ported to a common environment do you get economies of scale where operations could be automated. That is where theoretical big savings are. But few agencies appear willing to go through the stress and risk of having their mission applications migrate to a standard environment."

Federal agencies have closed 382 agency data centers under FDCCI and aim to close or consolidate roughly 1,200 of the nearly 2,900 identified data centers by 2015. However, Forman said the predominant approach to data center consolidation will result in little net savings.

Data or applications from one server are typically shifted to another without any consolidation, resulting in a "new contract or task order for the application's management," he said, adding that about 80 percent of systems administrators were contractors when he was at OMB.

"The more you try to run differently designed applications in a common data center, the more you need administrative software and people to help you run it," Forman said. "From the agency perspective, if I have a mission-critical application and I'm going to move it into a facility with multiple applications, am I going to trust people there who know nothing about this application to run it? No, and the people savings probably aren't going to be there."

He added that it is hard to convince agencies that own the systems and applications that performance will not suffer under consolidation. "That trust bond you have with a legacy contractor can be strong," Forman said. "Some applications go back to Cobol, [to] 1974."

Thus far, individual agencies have not reported specific cost savings resulting from consolidation efforts, said David Powner, director of IT management issues at GAO. And according to a Nov. 26 article from GCN (a sister publication to FCW), many industry experts feel agencies efforts to truly optimize are "moving at a snail’s pace."

Furthermore, Powner acknowledged the possibility that some agencies will experience a slight increase in costs initially. He cited as an example the Department of Homeland Security, which recently built two new data centers that should allow it to close most of its 43 existing centers.

"We're still in the mind-set that if data center consolidation is done right, there [are] savings to be had here," Powner said, noting that the $2.4 billion estimate is not out of reach. "We have a lot of underutilization of servers and a lot of unused capacity all over the place."