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DOD's Data Center Budget Challenge

The Department of Defense surpassed its data center consolidation targets in fiscal 2011 and continues a push for more data center closures. Budget concerns, however, are a "major risk factor" for the initiative's future success, the military says in a new report outlining its plans.

"Continuing budget resolutions have delayed the implementation of consolidation plans," the military said in the report, which was released as part of the DOD's requirements under a larger, governmentwide effort to shutter more than 40% of federal data centers by the end of 2015. "Although significant savings are expected, those savings cannot be borrowed to fund required investments for consolidating data centers. Consolidation requires investment in labor, new and more efficient hardware, upgrades to computer facilities, and increased operating costs when legacy systems run in parallel with new systems."

The budget environment is shaky: DOD budgets are slated to decrease by more than $450 million during the next decade and might be slashed more than double that, thanks to the super committee's failure to reach a deficit deal. Although analysts have predicted that IT spending won't be first on the chopping block, IT is expected to be squeezed somewhat by the cuts.

If the military meets its goals, the DOD says, the data center diet could lead to as much as $680 million in annual savings by 2015. Those savings will contribute to an overall $1 billion the DOD expects to see in savings in 2016 as part of the military's wider IT efficiencies effort. The data center savings would include an annual $58 million in energy savings, $511 million in operational costs and $111 million in construction and expansion costs. Other key objectives include reducing the military's environmental impact, improving efficiency and making the DOD more agile.

As part of the data center consolidation effort, DOD CIO Teri Takai is pushing a "DISA first" strategy in an effort to increase the Defense Information Systems Agency's stature as a service provider to the rest of the military. The Air Force, Army and Defense Logistics Agency all have signed on to consider DISA's enterprise computing centers for application and data hosting before looking into other options. DISA has been gaining in prominence since its early push into cloud computing and more recently its role as the new hosting provider for the Army's 1.4 million Microsoft Exchange users.

The DOD closed 55 data centers in fiscal 2011, three more than it had expected, but the data center consolidation plan doesn't detail agencywide targets going forward, citing budget uncertainty. However, in an earlier report on sustainability, the DOD estimated that it would close an additional 96 data centers in fiscal 2012, reducing the number of DOD server racks by 30% and servers by 25% along the way, and that it would close a total of 434 data centers between the start of the data center consolidation plan in 2012 and the end of fiscal 2015.

As for the services themselves, the Army plans to close 185 data centers through fiscal 2015 by focusing more on enterprise services and standardized computing environments, and has placed a moratorium on new data center builds to go with a 2010 moratorium on new server buys. The Air Force and Navy both will cut the number of data centers they operate in half. The Defense Logistics Agency and Military Health System plan to shutter about three-quarters of their data centers.

The DOD's plan was released behind schedule. In July, the Office of Management and Budget set a deadline requiring agencies to publicly release their data center consolidation plans by Oct. 7. All major federal agencies met that deadline except for the DOD, which said in a post on its website that it would release the report within 30 days pending an internal review, and then proceeded to miss that deadline as well. A DOD spokeswoman chalked up the delay to the military's size and complexity.

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