Government to Pull Plug on 137 Data Centers
By DAMIAN PALETTA

http://online.wsj.com/article/SB10001424052748704729304576287431386089352.html

The Obama administration will unveil plans Wednesday to shut 137 of the 2,094 
federal data centers by the end of the year, a move that officials see as a 
breakthrough in their effort to make the government's information-technology 
infrastructure more efficient and less costly.

The closures would affect 16 federal agencies, including the Pentagon and the 
State Department, in nearly every corner of the U.S., from Boston to Anchorage, 
Alaska, according to the White House plan.

Administration officials said that they didn't have an estimate of how many 
government and contractor jobs might be cut as a result.

The number of federal data centers has grown rapidly in recent decades, up from 
just 432 in 1998. But White House officials said many of the centers ran over 
budget and were underutilized.

The Obama administration began planning to pare back data centers in February 
2009, soon after President Barack Obama took office. The process proved 
complicated because it took months for officials to determine how many even 
existed.

The plan aims to close a total of 800 centers by 2015, which officials project 
would save $3 billion annually. The proliferation of facilities was the target 
of a Government Accountability Office report in March, which described them as 
a prime example of duplication and overlap in federal bureaucracy.

"Projects run over budget, they fall behind schedule, and they fail to deliver 
their promised functionality," said Jeffrey Zients, the White House's chief 
performance officer. "That's clearly unacceptable."

Data centers facilitate computer processing; they can be used for data storage, 
networking or housing servers. White House officials believe the number of 
facilities, spread out across many different agencies, is inefficient.

The government spends roughly $450 million on electricity for the centers, and 
White House officials estimate that 27% of a typical data center is utilized, 
far lower than averages for private-sector counterparts.

Consolidating data centers is part of the White House's broader effort to 
reduce the growth of government and spending, something critics have said the 
administration hasn't moved quickly enough to address. The government spends 
roughly $80 billion a year on information technology, just a fraction of 
overall federal spending, but officials believe roughly $24 billion of that 
amount is spent on data centers and their operations.

Many White House proposals to reduce the deficit, such as an overhaul of the 
tax code or eliminating certain Pentagon projects, require congressional 
approval. But the executive branch has more direct influence in the operations 
of federal agencies, making it easier to carry out the data-center 
consolidation. Still, such a move could face political resistance from 
lawmakers seeking to protect jobs at data centers in their districts.

"We do expect, obviously, in the coming months and years to make some of those 
really tough decisions where we would have to work really close with Congress 
to shut down data centers that frankly don't make sense," said Vivek Kundra, 
the government's chief information officer.

The administration has already shut 39 of them, with 98 more to be closed by 
year's end.

Before the reductions began, the Pentagon had 772 data centers, far more than 
any other agency, according to the government. Of the total closures, 57 will 
be within the Defense Department, 18 in the Department of the Interior and 14 
in the National Aeronautics and Space Administration.

Write to Damian Paletta at [email protected]
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