Readers of this blog may have seen recent reports citing Dave Powner, the Director of IT Management at the Government Accountability Office (GAO), testifying before the House Oversight and Government Reform Committee about the progress that federal agencies are making toward closing data centers. During his testimony, Mr. Powner stated that after seven years of counting the number of data centers run by agencies has stabilized at around 10,584. Of these the Department of Defense claims on the IT Dashboard to own 3,065, with 1,934 of these data centers classified as “non-tiered” and 1,131 as “tiered.”
The DoD says it costs an average of $1.75B each year to run its 3,000+ data centers. That spending breaks down as follows for fiscal years 2015 and 2016, according to the IT Dashboard.
This total number of data centers, however, when compared to figures provided by senior DoD personnel at events designed to communicate with industry, appears to considerably undershoot the actual number of data centers that the DoD owns. Consider these totals:
- Army – Approx. 1,200 data centers, according to Lieutenant General Robert Ferrell, the Army CIO/G-6.
- Air Force – Officially, 1,088 to 1,400 data centers. Unofficially, Lieutenant General William Bender, the AF CIO/A-6, believes the number is actually as high as 4,000.
- Navy/USMC – Approx. 300 data centers. This was the total last announced at the end of FY 2015. Presumably, more have been closed since then, but it is probably safe to assume that the number still open is not significantly lower than this.
- Defense Agencies – Approx. 450 data centers. This number, arrived at in early FY 2016 from DoD sources, is the hardest to verify and could be slightly lower.
Totaling these numbers gives us roughly 3,350 DoD data centers, if we set aside General Bender’s unofficial estimate for the Air Force. This total approximates the 3,065 data centers that DoD reports owning on the IT Dashboard, but it is still 10% higher than that total. Throw in the unofficial total that General Bender believes the Air Force owns and the total number of DoD data centers rises to 6,050!
Six-thousand-plus data centers is double the number that the DoD is officially reporting. Probably, then, the cost of running those data centers should also be doubled to more than $3.5B per year.
What does this mean for industry? It means that the cloud opportunity at the DoD is significantly larger than many may be assuming because if the DoD is seeking to reduce more than $3.5B of spending on data centers it will need to direct a considerable portion of that spending to commercial cloud providers. How big a percentage is up to question, but consider this. The Federal Communications Commission, an ant-sized agency compared to the DoD, now uses a public cloud for 100% of its IT infrastructure needs and in doing so it cut its legacy system maintenance costs by 50%.
Achieving this kind of deep cut in its IT infrastructure spending is precisely what the DoD wants and the only way to do it is by outsourcing IT infrastructure needs to commercial cloud partners. The value proposition is thus clear to both industry and the DoD. No one knows how much the DoD will spend on cloud, but considering the department wants to arrive at owning only 40 or so data centers as its end-state it sounds like $1.75B (i.e., 50% of $3.5B) is a reasonable starting assumption.
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