Feds Trim 800 Data Centers. Is the Private Sector Next?

WASHINGTON, DC-Vivek Kundra, the departing federal chief information officer, fleshed out further details of the government’s previously announced plan to scale back its data computer centers by 40%, or 800 centers. The administration has identified 178 centers to be closed by 2012, the New York Times reports. Earlier this year it named 136 that would be shut down by the end of the year.

The budget constraints affecting just about every aspect of the government is clearly one driver. However other trends in the IT industry are also propelling the administration along this path--namely, the new efficiencies that cloud computing can deliver as well as new abilities by data centers to deliver services to far flung locations, according to Charles King, president and principal analyst at Pund-IT. Indeed, King tells GlobeSt.com, there is a shift underway with data center economics that not only is remaking the government’s computing operations, but the private sector’s as well.

“We have been seeing signs of this level of consolidation emerging for the last three or four years,” he says. “For a number of reasons, including the economy and the renewed focus on costs, it is really starting to become apparent now.”

You’d never guess that, though, in locations like Washington, DC, where data center space is available, but only barely. More companies are finding if they want the additional computing space they must build it themselves.

“Typically what has been happening is that as companies have been leveraging new virtualization technology on the server side and storage technology they have been able to either maintain or increase computing capacity while using less overall space than they did in the past,” King says. “That is why we are seeing an overall reduction in floor space dedicated to data centers.”

At the same time there has been a real boom in data center construction in some regions around the country, such as North Carolina’s Research Triangle Park, which is serviced by Duke Energy, a low cost provider, King says. “Some companies say the price they are paying for electrical power in North Carolina is one quarter to one third to what they must pay in their current urban or suburban facilities.” That, coupled with the ability of data centers to service firms across the country, the introduction of cloud computing and other new technologies are the fundamental drivers now, according to King. “What the federal government is doing--we will see that again and again in both private and public sector as the years go by.”