Federal Data Center Consolidation and Optimization: Where’s the Savings?

Published: May 25, 2017

Data Center

Agencies are now reporting only $656M in planned savings from data center consolidation and optimization efforts for FY 2016 through 2018. This number falls $3.3B short of the anticipated savings agencies estaimated for the same time period in November 2015.

As part of FITARA legislation, GAO was tasked with monitoring data center consolidation and optimization progress on an annual basis.  GAO reviewed agencies’ data center closure plans and consolidation savings progress and plans and evaluated the extent to which agencies’ annual consolidation strategic plans are complete. GAO also solicited agency input and comments based on its initial findings. 

GAO found that the 24 CFO agencies participating in data center optimization effort have made progress by closing 4,388 out of a total of 9,995 data centers as of August 2016, with plans to close an additional 1,209 by the end of FY 2019.  Agriculture, Defense, Interior, and Treasury accounted for 84% of the completed closures.

Additionally, 18 of the 24 agencies reported achieving about $2.3B in total cost savings and avoidance from their data center consolidation and optimization efforts from FY 2012 through August 2016. Commerce, Defense, Homeland Security, and Treasury accounted for approximately $2.0B, or 87%, of the total. 23 agencies reported approximately $656M in planned savings for FY 2016-2018. However, this savings figure is about $3.3B less than the $4.0B in planned savings they had anticipated for the same time period back in November 2015. 

The reduction in planned savings stems from eight agencies who now estimate less savings for FY 2016-2018 than they originally estimated in their November 2015 calculations.  Also, the new savings estimate does not include cost savings information for the Department of Defense.

Due to inconsistencies in calculating and reporting savings totals and future saving estimates, actual savings and avoidance may be higher.  Additionally, incomplete data center strategic plans contribute to inaccuracy of savings estimates.

As of April 2017, only seven of the 23 agencies that submitted data center strategic plans, included all required information. The remaining plans either partially met or did not meet the requirements.

GAO also identified inconsistencies in how agencies report historical cost savings in their DCOI strategic plans, versus the quarterly cost savings numbers they submit to OMB.  GAO believes these inconsistencies are due in part to weaknesses in OMB’s oversight of agencies’ savings information and their DCOI strategic plans.

GAO recommends added direction and oversight from OMB to ensure agencies complete their Data Center Optimization Initiative (DCOI) strategic plans and report achieved data center cost savings consistently across all reporting mechanisms.