Patterns Emerge in Consolidating Data Centers

August 2008
By Lt. Gen. Harry D. Raduege Jr., USAF (Ret.)

“It’s all about the data” is a popular expression today. More and more, we’ve come to realize that data is the central building block for protecting, processing, sharing and storing information. And, as government and industry data owners learn to believe in these realities, they quite often decide to establish their own data centers to maintain control. On the surface, this might easily seem like the right thing to do, but it isn’t always the best course to achieve effective consolidation. Being aware of data center consolidation experience and realities can save organizations large sums of money and improve operations.

I first began watching the patterns in data center consolidation in the early 1990s, when individual organizations within the U.S. Defense Department had built 194 mainframe data centers. However, through Defense Management Report Decisions, these numerous data centers were transferred into the Defense Information Systems Agency (DISA) for management attention. Over the past 18 years, the data center transformation achieved by DISA professionals has been nothing short of remarkable. Their actions are something that we can all continue to learn from today, both in government and in industry.

In 1990, after inheriting the Defense Department data centers, DISA found itself managing 194 centers being run by more than 9,600 government workers with mainframe workload of 4,645 millions of instructions per second (MIPS) at an operating cost of more than $1 billion per year. By 1995, DISA continued to leverage advancements in technology, and it adopted commercial best practices to achieve a substantial increase in efficiency along with significant cost reductions, which saved hundreds of millions of dollars per year. These advancements were achieved by consolidating the mainframe workload in all 194 locations into 16 larger data centers, which in 2002 were further consolidated into five data centers and one legacy processing site.

Overall, these actions achieved a 76 percent reduction in government workers and a 75 percent reduction in computing costs while accomplishing more than 60 percent more work. Between 1990 and 2002, the efforts of DISA and others to consolidate and optimize mainframe processing reduced the Defense Department’s annual operating budget from more than $1 billion to $263 million—a 75 percent decrease.

In 2002, DISA proposed another round of consolidation and modernization actions to begin later that year and to be completed by 2005. This further action would save the department another $143 million per year as well as improve security and operational availability. This initiative included another 50 percent reduction in personnel—1,172 spaces—and an additional 39 percent rate reduction for customers. DISA also continued its proven track record of taking care of employees with these staffing reductions, as involuntary separations amounted to less than 4 percent of positions eliminated.

With all of these improvements through data center consolidation, the agency produced a solid business case as well as an environmental assessment that showed no significant impact to affected locales. The overarching criteria for consolidation were germane, fair, objective, quantifiable and consistent with previous usage as well as consistent with what had successfully passed congressional oversight and scrutiny. No site was closed under this initiative, although staffing at a number of them was significantly reduced as a “lights dim” operation was implemented.

This data center consolidation and support work has continued over the years. The bottom-line figures from 1990 to this year show a government staff reduction of approximately 8,000 people representing an 83 percent decrease; storage capacity increase of 2,500 percent; a server cost 20 percent below peers; and a “best in class” rating from Gartner over the years when compared with other government and industry data center operations.

The successful data center consolidation led to fewer staff, lower cost, customer savings and sterling performance—definitely, a winning formula. The results in effectiveness and efficiency are impressive. Consistently, DISA’s data center services are more scalable, secure and available, and they always keep pace with best commercial practices.

This data center consolidation represents a defense agency serving as the consolidation point for many diverse elements. It does not necessarily mean that effective consolidation must be performed in-house.

What has continued to surprise me over the years is why many organizations still follow a somewhat predictable pattern of “establishing their own” when dealing with data centers. Most organizations find over time—and figures prove it—that huge savings and improved operating success can be realized by outsourcing data center services to trusted organizations.

So then, why establish your own consolidation center when you can rely on a trusted provider in government or industry—one who knows the lessons learned and secrets for reducing computing costs and improving performance through consolidation, modernization and optimization of data centers? I guess some just want to maintain old patterns that will eventually migrate into what many have consistently learned over the years from data center consolidation.

Lt. Gen. Harry D. Raduege Jr., USAF (Ret.), is chairman of the DeloitteCenter for Network Innovation.