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Datacentre consolidation drive saves US federal agencies $2bn

IT reforms pushed through by White House spending watchdog generate $3.6bn in overall savings

White House-led efforts to curb the number of datacentres used by US federal agencies have generated savings of $2bn over the past three years, figures show.

Datacentre consolidation and optimisation were at the centre of the IT reforms pushed through by the Office of Management and Budget (OMB) in 2010, as part of its drive to cut down on duplicative spending by federal agencies.

As a result, agencies have been encouraged since 2012 to embark on IT “reductions” that could cut their overall departmental spend by 10% through the culling of “duplicative, under-performing or lower-priority investments” in technology.

According to a report published by the US Government Accountability Office (GAO), the OMB’s work has resulted in $3.6bn in cost savings and avoidance between the 2011 - 2014 financial years.

Out of the 24 participating federal agencies, the bulk of the savings (69%) have been brought about by the activities of the Departments of Defense, Homeland Security, the Treasury and the Social Security Administration.

Datacentre consolidation and optimisation projects have been cited as the source of $2bn of these savings, as agencies have taken steps to drive down the energy consumption and physical space taken up by their facilities through investments in better performing IT equipment.  

Under the terms of the OMB’s guidance, agencies are supposed to reinvest the money saved in newer technologies that would drive-up operational efficiency, performance and deliver a good return on investment in 18 months of implementation.

However, the GAO report suggests only five of the 27 agencies required to share details of their reinvestment plans have done so to date, prompting calls for more to be done to ensure agencies comply with this part of the OMB’s requirements.

“As a result, agencies’ plans were substantially short of OMB’s overall fiscal year 2014 targets – $3bn in proposed reductions and $2.1bn in proposed reinvestments – compared with OMB’s targets of $7.6bn in reductions and as much as $7.6bn in reinvestments,” the report states.

The report’s findings are sure to be of interest to the UK and Scottish public sector, as both have embarked on similar datacentre consolidation drives to cut costs.

In the case of the former, this has resulted in the launch of the UK government’s Crown Hosting joint venture with Ark Data Centres in March 2015. This was set up to enable public sector bodies to procure datacentre space in a government-owned and government-approved facility as an alternative to building their own.

In Scotland, the government has attempted to address the public sector’s over-reliance on private datacentres through the roll-out of its data-hosting framework. This will run until May 2017, offering users access to co-location and cloud services through a range of third-party suppliers, including Atos IT Services, Brightsolid, Capita IT Services, CGI IT UK, Fujitsu Services, Iomart, Onyx Group and Pulsant. 

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