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Data Center Optimization: Agencies Report Progress and Billions Saved, but OMB Needs to Improve Its Utilization Guidance

GAO-21-212 Published: Mar 04, 2021. Publicly Released: Mar 04, 2021.
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Fast Facts

Federal agencies reported operating 5,916 data centers in 2018. As part of IT acquisition reform efforts, an Office of Management and Budget initiative seeks to reduce data center duplication and costs by, for example, using servers more efficiently.

All of the 24 participating agencies in 2020 reported progress meeting OMB's goals: They expected to close 230 centers and save $1.1 billion over 2 years.

In 2019, OMB changed how server use is measured so that actual server use is no longer assessed. Our recommendation addresses this issue. Agencies have addressed about half of our 125 recommendations related to this initiative since 2016.

This page has been updated to correct the number of data centers expected to close.

data center server room

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What GAO Found

The 24 agencies participating in the Office of Management and Budget's (OMB) Data Center Optimization Initiative (DCOI) continue to report progress toward meeting OMB's goals for closing data centers and achieving the related cost savings. According to data submitted by the 24 agencies, almost all of them met or planned to meet their closure and cost savings goals for fiscal years 2019 and 2020. As of August 2020, the agencies reported that they expected to achieve 230 data center closures, resulting in $1.1 billion in savings, over the 2-year period. Agencies expected to realize a cumulative total of $6.24 billion in cost savings and avoidances from fiscal years 2012 through 2020.

However, agencies have excluded approximately 4,500 data centers from their inventories since May 2019 due to a change in the definition of a data center. Specifically, in June 2019, OMB narrowed the definition of a data center to exclude certain facilities it had previously identified as having potential cybersecurity risks. GAO reported that each such facility provided a potential access point, and that unsecured access points could aid cyber attacks. Accordingly, GAO recommended that OMB require agencies to report those facilities previously reported as data centers so that visibility of the risks of these facilities was retained. However, OMB has not taken action to address the recommendation. Overall, GAO has made 125 recommendations since 2016 to help agencies meet their DCOI goals, but agencies have not implemented 53.

The 24 agencies reported varied progress against OMB's data center optimization targets for fiscal year 2020 (see figure).

Agency-Reported Progress towards Meeting Office of Management and Budget (OMB) Data Center Optimization Targets, as of August 2020

Agency-Reported Progress towards Meeting Office of Management and Budget (OMB) Data Center Optimization Targets, as of August 2020Notes: Virtualization measures the number of servers and mainframes serving as a virtual host. Advanced energy metering counts data centers with metering to measure energy efficiency. A metric is not applicable if an agency does not have any agency-owned data centers or if its remaining centers are exempted from optimization by OMB.

In June 2019, OMB revised the server utilization metric to direct agencies to develop their own definitions of underutilization, and then count their underutilized servers. As a result, agencies adopted widely varying definitions and were no longer required to report actual utilization, a key measure of server efficiency.

Why GAO Did This Study

In December 2014, Congress enacted federal IT acquisition reform legislation known as FITARA, which included provisions related to ongoing federal data center consolidation efforts. OMB's federal Chief Information Officer launched DCOI to build on prior data center consolidation efforts and improve federal data centers' performance.

FITARA included a provision for GAO to annually review agencies' data center inventories and strategies. This report addresses (1) agencies' progress on data center closures and the related savings that have been achieved, and agencies' plans for future closures and savings; (2) agencies' progress against OMB's data center optimization targets; and (3) the effectiveness of OMB's metric for server utilization and how the agencies are implementing it. To do so, GAO reviewed the 24 DCOI agencies' data center inventories as of August 2020, their reported cost savings documentation and data center optimization strategic plans, and OMB's revised utilization metric.

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GAO reiterates that agencies need to address the 53 recommendations previously made to them that have not yet been implemented. GAO is making one new recommendation to OMB to revise its server utilization metric to more consistently address server efficiency. OMB had no comments on the report and the recommendation directed to the agency. Of the 24 DCOI agencies, five agreed with the information in the report, six did not state whether they agreed or disagreed, and 13 had no comments.

Recommendations for Executive Action

Agency Affected Recommendation Status
Office of Management and Budget The Director of the Office of Management and Budget should reexamine its DCOI guidance regarding how to measure server utilization and revise it to better and more consistently address server efficiency. (Recommendation 1)
In January 2022, an official from the OMB Office of the Federal CIO stated that the agency is still working to address this recommendation. GAO will continue to monitor OMB's efforts to implement this recommendation. By implementing this recommendation, OMB will be better able to establish appropriate metrics to meet the goals of the Data Center Optimization Initiative.

Full Report

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Agency consolidationsCost savingsData centersIT investment managementInformation technologyProductivity in governmentRedundancyReporting requirementsComputer serversInventory