Federal Data Center Optimization Initiative Progress, First Quarter FY 2021

Since 2010, the federal government has made a concerted effort to consolidate and optimize data centers. In FY 2016, OMB launched the Data Center Optimization Initiative (DCOI). In June 2019, OMB updated the guidance for the initiative to more closely align it with FITARA objectives and refocus efforts on projects that drive the most cost savings and return on investment (ROI).

Over the years, OMB repeatedly extended data center consolidation and optimization deadlines, most recently to September 30, 2022.  The National Defense Authorization Act for Fiscal Year 2020 extended data center requirements through October 1, 2022. As a result, in November 2020, OMB released a memo extending DCOI requirements to September 30, 2022.

GAO has criticized OMB’s changes to DCOI, citing that the new definitions of data centers limit visibility into federal computing facilities. In March, GAO released an evaluation of federal agency progress toward DCOI goals and concluded that agencies are making progress in meeting DCOI metrics and goals, but visibility into approximately 4,500 former data centers has been diminished due to changes in the definition of a data center.  

The IT Dashboard does not give definitions or explanations for the numbers presented. Instead, the data is left to user interpretation. The dashboard data shows that the “total” number of data centers has decreased over the last several years.  This is likely due to the change in the definition of a data center precipitated by the DCOI guidance made final June 2019. Additionally, the guidance established Key Mission Facilities (KMF) allowing agencies more latitude in requesting exemption from consolidation requirements.

The chart below is described by the IT Dashboard as data center closures for all facilities.  The dashboard notes that definitions changed and KMFs were added in Q4 FY 2018. We are also left to assume that “closed” must mean the cumulative number of data centers that have been closed over time and that the reason the number has gone up and down is due to the change in the definition of a data center. 

The following chart shows the closures for valid tiered facilities.  According to June 2019 DCOI guidance, a valid tiered facility is a “purpose-built physically separate and dedicated space.”  

The IT Dashboard did not give cost savings statistics for the first quarter of FY 2021.  However, agencies reported total cost savings of $120M for data center optimization efforts in FY 2020.  This is short of their goal of $766M in cost savings for the time period. There is no cost savings goal specified for FY 2021.

According to the data and the chart below, the number of cloud instances and virtual hosts dropped slightly in 1Q FY 2021.  The number of servers also declined and the percentage of virtual hosts to servers increased over 2 percent showing an increase in virtualization for federal data centers. 

According to the data, the number of facilities with energy metering dropped in the first quarter of FY 2021, falling from 26.4% of facilities to 25.8%. However, the total number of facilities dropped by 39 facilities. 

Although the DCOI effort has lost some momentum, federal contractors should continue to see opportunities to assist agencies with data center consolidation and optimization efforts. Opportunities exist in the areas of application rationalization, infrastructure modernization, cloud migration, and shared service migration.