Federal Data Center Optimization Progress, FY 2022

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. Since the most recent data set encapsulates the remainder of FY 2022, this may be the final data set posted on the IT Dashboard regarding data center statistics. Additionally, the 14th iteration of the FITARA scorecard released in July contained the last reporting for the data center category.

Over the life of the effort, GAO and Congress have criticized OMB’s changes to DCOI, citing that the new definitions of data centers limit visibility into federal computing facilities. A March GAO report showed mixed progress in closing and optimizing data centers and concluded that some agencies continue to struggle optimizing their existing data centers due to technical and budget constraints. GAO found five out of 17 agencies reviewed failed to meet OMB‘s metric for reducing the number of servers and mainframes serving as virtual hosts in their data centers, as well as increasing the amount of advanced energy metering covering their floor space.

OMB released DCOI guidance in 2019 changing the definition of data centers to only include tiered data centers and establishing Key Mission Facilities (KMF) which allows agencies more latitude in requesting exemption from consolidation requirements. I would personally argue that the ability for agencies to classify data centers as KMFs, thereby making most exempt from DCOI goals, further limits visibility, and progress towards the initiative’s goals.

The charts below show the cumulative number of closed data centers and open data centers for FY 2019 through FY 2022. I am unable to explain why the cumulative number of closed, non-tiered data centers has gone down.  I’m assuming that these data centers may have been reclassified as tiered data centers or KMFs.  

The chart below shows cost savings related to data center closures and optimization over the last four fiscal years. The IT Dashboard shows $4.9B in cumulative cost savings derived from data center optimization and closure efforts for FY 2016 through FY 2022.  However, the site only shows cost savings by year for FY 2019 through FY 2022. Cumulative cost savings in the chart prior to FY 2022 comes from my collection of previously reported data center statistics posted on the IT Dashboard. 

According to the data and the chart below, the number of virtual hosts grew each year from FY 2019 forward, while the number of servers declined each year since FY 2020, increasing the virtualization rate by nearly 4% since FY 2020. 

According to the data, the number of facilities with energy metering grew by eight facilities in FY 2022, increasing the percentage of metered facilities from 26.1% to 27.8%. Although the percentage of facilities with energy metering capabilities is increasing, agencies are falling short of their goal for the number of facilities with metering capabilities. 

Although the DCOI effort is essentially complete from a policy perspective, federal contractors should continue to see opportunities to assist agencies with data center optimization efforts. Opportunities still exist in the areas of application rationalization, infrastructure modernization, cloud migration, and shared service migration.