Obama Administration mandates datacenter consolidation, but that only addresses part of the problem

By Chris Moore and John Emmitt

The Obama Administration has mandated datacenter consolidation for government agencies. Vivek Kundra, former Federal CIO, commented last year that in some cases, only 7% of existing Federal government datacenter capacity is currently being utilized. Jeffrey Zients, chief performance officer and deputy director for management at the Office of Management and Budget, stated in a recent Whitehouse blog that “on average these centers have been using only 27 percent of their computer power.” The datacenter consolidation program goes hand-in-hand with Kundra’s cloud computing strategy. The Obama administration has announced plans to shut down 178 datacenters in 2012, on top of the 195 centers expected to be closed by the end of this year.

With that sort of low utilization rate for existing datacenters, consolidation certainly makes sense and will save the Federal government millions of dollars on hardware, power and real estate costs. But this only solves part of the problem. As discussed in a recent Flexera Software blog, the Federal government must also modernize management of software assets to reduce costs for software licenses and maintenance. Software typically represents about 25 to 35% of the IT budget and that percentage has been growing while the hardware percentage has been shrinking. Software asset management best practices include consolidation of software vendors and applications to remove redundancies and maximize volume purchase discounts.

Left unmanaged, large organizations often have several applications that serve the same purpose. By consolidating applications, they can reduce license, maintenance and even internal support costs. Similarly, large organizations may have multiple groups buying software from different distributors or resellers. Vendor consolidation and centralized software procurement allow organizations to leverage their purchasing power to get the best discounts for the enterprise as a whole.

But there’s more—optimized license management also means that organizations can minimize shelfware, further reducing ongoing software maintenance costs. Automated software asset and license management tools allow organizations to track software usage and remove or reallocate unused applications. These tools also help organizations leverage their license entitlements (product use rights) to ensure that they get maximum use of the software while maintaining license compliance.

Here is a 5 step plan for Federal agencies to get started on an optimized software license management program:

1. Centralize software procurement and consolidate software vendors
2. Implement an automated license management solution that allows you to—
3. Consolidate vendors and applications
4. Track usage for key applications to eliminate shelfware and allow reharvesting of unused licenses
5. Leverage your license entitlements (product use rights) to optimize license consumption and reduce software costs