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Planning for Data Center Consolidation

The Federal Chief Information Officer issued on 2/26/10 a request for submission of data center consolidation plans. Agencies were asked to deliver this by June 30, 2010. The plans would address reductions in the growth from 432 in 1998 to 1,100 in 2009 but the objective was cost reduction.

A review of what the Agencies are proposing has raised a number of issues:

1. Agencies are using server consolidations in lieu of data center reductions. Counting the number of servers is not an appropriate metric. A HP Proliant DL100 server costs from $699 to $1,529. A HP Proliant DL700 server costs from $16,999 to $28,999. There is a factor of 41x difference.  All servers are not equal. The number of servers is not an index of data center size.

2. Server consolidation without virtualization can replace a poorly utilized $699 server with a poorly utilized $28,999 server. There should be distinctions between consolidations through upgrading vs. consolidations through virtualization. There are operating major cost advantages in virtualization.

3. The greatest gains in data center consolidations are not in reducing hardware costs (<10% of operating costs) but in declining applications operations and maintenance expenses (>50% of cost) plus data center overhead (>20%). An excessive concentration on the cutting of hardware costs as well as power efficiency costs overlooks what are the greatest savings opportunities.

4. In DoD there are a large number of locations, which are not designated as data centers, but are nevertheless running numerous servers. Excluding small locations from consolidation plans many opportunities for the savings are lost.

5. Any discussion of data center consolidation must include backup, fallback and service availability. Stand-alone, hard to defend and underfunded sites, with low capacity utilization, will result in service levels that are below acceptable standards. The primary objectives for data center consolidation should be the improvement in performance and in high levels of information security. Cost reductions are necessary but only secondary.

6. The analysis of data center consolidation savings must include an evaluation of related communications costs. Since the speed of propagation of transactions over telecomm lines can be counted in a few microseconds anywhere in the world a reduction in the number of data centers is feasible if greater bandwidth is available.


Any plans proposing a consolidation of over 1,000 data centers to a much smaller number of secure sites must include the total cost of ownership of Operations and Maintenance of $49 billion/year, according to OMB VUE FY09. (  Plans that focus only on hardware savings are not acceptable.

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