On Tuesday, May 14, 2013, the House Oversight and Government Affairs Subcommittee on Government Operations held a hearing on “Data Centers and Cloud Computing:  Is the Government Optimizing New Information Technologies to Save Taxpayer Dollars?”

Citizens Against Government Waste’s (CAGW) most recent cloud computing report, the 2012 Federal Cloud Review discussed the potential for savings in federal information technology (IT) through greater adoption of cloud computing.  As the federal government shifts its operations towards increased use of cloud computing tools, there will be less need for it to operate the large number of federal data centers it currently owns as part of its IT portfolio.

In the past 15 years, the federal government’s growing need for IT led to a large increase in the number of federal agency data centers.  According to testimony provided by the Government Accountability Office (GAO), there were 432 federal data centers in 1998.  By 2009, that number had risen to more than 1,100 operating at a significant cost to the federal government in hardware, software, maintenance, real estate and energy use.

In 2010, as part of the administration’s 25 Point Implementation Plan to Reform Federal Information Technology Management, the Federal Data Center Consolidation Initiative (FDCCI) was instituted to reduce the number of data centers across the country.  At the May 13 hearing, GAO testified that under FDCCI, the federal government has made some progress towards closing 40 percent, or 1,253 of its 3,133 total federal data centers operating across 24 participating agencies.  This statement was reiterated by the U.S. Department of Interior's Chief Information Officer Bernard Mazer, who indicated that as of May 10, 2013, agencies have closed 484 data centers with plans to close 855 by the end of fiscal year 2013.  Mr. Mazer highlighted the use of cloud-based technologies by agencies to accelerate data center consolidation efforts.

However, GAO cited issues with the Office of Management and Budget’s (OMB) lack of adequate tracking and reporting on performance measurements, including cost savings, which limit the government’s ability to oversee agency progress toward key goals and objectives.  In March 2013, OMB issued a memorandum shifting integration of the FDCCI to the PortfolioStat initiative which conducts an annual review of federal IT investments.  According to Mr. Mazer, this movement is expected to strengthen the focus on tracking cost savings from the data center consolidation.

According to testimony provided by Steve O’Keeffe of MeriTalk, more than 56 percent of federal IT professionals surveyed graded their agency’s consolidation efforts at “C” or below, and only half believe their agency is on target to close 1,200 data centers by 2015.  Among the challenges cited by the May 13, 2013 MeriTalk report were overcoming mission owner objections (45 percent), finding the budget to consolidate (48 percent), shutting down or consolidating applications (33 percent), security issues (18 percent), and completing data center inventories (15 percent).

CAGW President Tom Schatz provided the committee with a statement for the hearing record, in which he pointed out that, “…a tight rein must be kept on the data reporting of the status of federal IT projects, including the data center consolidation effort through both the IT Dashboard and the PortfolioStat.  Taxpayers should continue to keep a watchful eye on federal IT investments, particularly cloud computing and data center consolidation efforts.”

The use of new technology tools to improve IT management provide opportunities for the federal government to save taxpayer dollars while increasing efficiency.  However, without proper metrics to evaluate agency progress and cost benefits as the federal government moves forward with cloud computing adoption and data center consolidation, it is difficult to discern the actual savings accrued.