Reforming and Reducing Government IT Expenses
Feds Turn Up the Heat to Hasten Data Center Optimization
The OMB’s latest 25-point plan to reform federal IT management is designed to reduce the government’s 2,100 data centers to 800 by 2015, and requires the adoption of a ‘cloud-first’ policy for IT procurements, although funding requirements for both data center consolidation and investment in cloud-based services remain in question.
The Office of Management and Budget (OMB) federal IT reform effort is the latest is a series of data center consolidation and cloud computing initiatives launched in the last year, including the Federal Data Center Consolidation Initiative (FDCCI), which was rolled into the new 25-point OMB plan.
Despite the intensified focus on data center consolidation and cloud-based services, industry observers wonder how quickly federal agencies can adapt to the accelerated pace of change and adjust to not only new technologies, but also new cloud-based procurement strategies. While many government organizations have already invested in virtualization, for example, to aid in reducing the number of servers and amount of floor space required for data center operations, moving from those early benefits to cloud-based services is a far greater leap. “The crux of the problem is really a combination of the complexity involved and the security/data privacy concerns that will likely slow many government agency efforts to adapt to the new cloud-first model,” said Greg Potter, Research Analyst for In-Stat, Scottsdale, Ariz.
In it’s just published U.S. Business Spending by Size of Business and Vertical, 2009–2014: Cloud Computing and Managed Hosting Services, In-Stat outlines spending growth for cloud computing based on each type of industry vertical market and by organizational size. Small businesses are expected to adapt most quickly, with spending estimated at $3 billion in 2010. Total government spending on cloud-based services meanwhile, will grow from $131 million in 2010 to $275 million in 2014 – more than 100% growth – but still far less than the growth anticipated for small organizations. “Larger federal institutions will be forced to proceed cautiously with cloud-based investments due to high security requirements and a general requirement for mature cloud service offerings,” said Potter.
There’s also a need for more guidance, training and education, he added. In the end, it seems that most large organizations, both in the public and private sectors will choose the hybrid cloud approach, “moving mission-critical information and applications to a private cloud, and partnering with a prominent public cloud infrastructure provider for non-critical services and web hosting,” Potter explained.
In the public sector, the fastest growth in cloud spending will come from small, city governments and other municipal offices. In-Stat predicts 65% of public cloud spending will come from the smallest organizations, those with 1-99 employees, according to its research.
In general, government watchers expect to see greater consolidation of IT operations for a large majority of federal agencies in the coming year, as federal oversight intensifies the focus on reducing costs, while improving security and data management. Ultimately, data center optimization is a multi-layered approach that will maximize an organization's technology resources. Via comprehensive networking, server and storage improvements, in addition to effective power and cooling upgrades in data centers, public sector organizations will make headway in achieving federally mandated IT goals, and gain the flexibility to adapt to future requirements.