UPDATED 23:54 EDT / SEPTEMBER 16 2015

NEWS

Federal government’s “cloud first” policy saves $3.6B in four years

Federal agencies accumulated IT cost savings of $3.6 billion between 2011 and 2014 through data center consolidation and migrating to the cloud, according to a new report by a government watchdog.

The federal government began an initiative to cut IT spending in 2010. The plan called for federal agencies to shift workloads to the cloud where possible, consolidate data centers and share more services with other agencies. The Government Accountability Office (GAO) said these efforts led to savings of around $3.6 billion in IT costs, either through direct reductions or by avoiding new expenses. The federal government still spends around $80 billion on IT annually.

Most of the reductions were achieved through the government’s “cut and reinvest” strategy that called for agencies to come up with a plan to reduce IT spending by 10 percent, and then use the savings to reinvest in IT projects that result in significantly higher savings. In total, 26 agencies took part in the program.

The four largest federal agencies – the Department of Defense, the Department of Homeland Security, the Treasury Department and the Social Security Administration – achieved the largest savings, the GAO said. Together, these agencies accounted for 70 percent of the total savings made.

The bulk of the savings came from data center consolidation projects, accounting for approximately 50 percent. The consolidation resulted in reduced hardware needs, some data center closures, the consolidation of licensing agreements, increased use of virtualization, more use of electronic analysis tools, migrations to Web-based management platforms, and moves towards a new “cloud first” policy.

Going forward, the GAO recommends that agencies see their savings programs through to the end, reinvesting savings made there in performance tracking projects with compulsory enforcement by the Office of Management and Budget (OMB). The OMB should also be responsible for defining targets, the GAO said.

Photo Credit: JD Hancock via Compfight cc

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