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«M-16-19 MEMORANDUM FOR HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES FROM: Tony Scott Federal Chief Information Officer SUBJECT: Data Center ...»

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August 1, 2016



FROM: Tony Scott

Federal Chief Information Officer

SUBJECT: Data Center Optimization Initiative (DCOI)


In 2010, the Office of Management and Budget (OMB) launched the Federal Data Center

Consolidation Initiative (FDCCI) to promote the use of green IT by reducing the overall energy

and real estate footprint of government data centers; reduce the cost of data center hardware, software, and operations; increase the overall IT security posture of the Federal Government; and shift IT investments to more efficient computing platforms and technologies. 1 In December 2014, the President signed into law the Federal Information Technology Acquisition Reform Act (FITARA), 2 which enacts and builds upon the requirements of the

FDCCI. FITARA requires that agencies submit annual reports that are to include:

comprehensive data center inventories, multi-year strategies to consolidate and optimize data centers, performance metrics and a timeline for agency activities, and yearly calculations of investment and cost savings.

In addition, FITARA requires the Administrator of the Office of E-Government and Information Technology (henceforth referred to as the Office of the Federal Chief Information Officer (OFCIO) 3) to establish and publish cost savings and optimization improvements, provide public updates on cumulative cost savings and optimization improvements, and review agencies’ data center inventories and the implementation of data center management strategies.

The FDCCI was first established by OMB “Memo for CIOs: Federal Data Center Consolidation Initiative,” issued on February 26, 2010, and modified by subsequent memoranda.

Title VIII, Subtitle D of the National Defense Authorization Act (NDAA) for Fiscal Year 2015, Pub. L. No. 113This office was established in accordance with Section 101 of the E-government Act of 2002, codified at 44 U.S.C.

§ 3602, and is headed by the Federal government Chief Information Officer. This office will also be referred to as OMB’s Office of the Federal Chief Information Officer (OFCIO).

This memorandum defines a framework for achieving the data center consolidation and optimization requirements of FITARA, the criteria for successful agency data center strategies, and the metrics OMB OFCIO will use to evaluate the success of those strategies.

Policy As of August 1, 2016, the FDCCI is superseded by the Data Center Optimization Initiative (DCOI) established in this memorandum.

The DCOI, as described in this memorandum, requires agencies to develop and report on data center strategies to consolidate inefficient infrastructure, optimize existing facilities, improve security posture, achieve cost savings, and transition to more efficient infrastructure, such as cloud services and inter-agency shared services. 4 The requirements in this memorandum apply to all CFO Act agencies, 5 including the Department of Defense. 6 Leadership and Responsibilities All data center infrastructure and services, including contracts for third-party data centers and services agency-wide, shall be managed by the agency CIO in a manner consistent with FITARA 7 and OMB Memorandum M-15-14, “Management and Oversight of Information Technology.” 8 The agency CIO shall be responsible for implementing and measuring progress toward meeting the goals set forth in this memorandum.

Transition to Cloud and Data Center Shared Services Development Freeze for New and Current Data Centers Beginning 180 days after issuance of this memorandum, agencies may not budget any funds or resources toward initiating a new data center or significantly expanding 9 an existing data center Federal Information Technology Shared Services Strategy, May 2, 2012, https://www.whitehouse.gov/sites/default/files/omb/assets/egov_docs/shared_services_strategy.pdf.

See Chief Financial Officers Act of 1990, Pub. L. No. 101–576.

Per Sec. 834(b)(1)(C) of the FY2015 NDAA, the Department of Defense may submit to OMB, in lieu of the Strategic Plan described in this memorandum, the defense-wide plan and cost savings report required under sections 2867(b)(2) and 2867(d), respectively, of the FY2012 NDAA. If submitting such plans and reports in lieu of the Strategic Plan, DOD shall ensure all information required by the Strategic Plan is included in the submitted plans and reports.

Title VIII, Subtitle D of the National Defense Authorization Act (NDAA) for Fiscal Year 2015, Pub. L. No. 113OMB Memorandum M-15-14, “Management and Oversight of Federal Information Technology,” June 10, 2015, https://www.whitehouse.gov/sites/default/files/omb/memoranda/2015/m-15-14.pdf.

The General Services Administration (GSA) Office of Government-wide Policy (OGP) will coordinate with OMB to define thresholds for what constitutes “significant” expansion within 60 days of publication of this memorandum.

without approval from OMB OFCIO. 10 To request such approval, agencies must submit a written justification that includes an analysis of alternatives (including opportunities for cloud services, inter-agency shared services, and third party co-location) and an explanation of the net reduction in the agency’s data center inventory that will be facilitated by the new or expanded data center (such as through consolidation of multiple existing data centers into a single new data center).

Consolidation and Closure of Existing Data Centers

As previously required by the FDCCI, agencies shall continue to principally reduce application, system, and database inventories to essential enterprise levels by increasing the use of virtualization to enable pooling of storage, network and computer resources, and dynamic allocation on-demand. Thereafter, agencies shall evaluate options for the consolidation and

closure of existing data centers, 11 by (in order of priority):

1. Transitioning to provisioned services, including configurable and flexible technology such as Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS) to the furthest extent practicable, consistent with the Cloud First policy. 12

2. Migrating to inter-agency shared services or co-location data centers.

3. Migrating to more optimized data centers within the agency’s data center inventory.

Cloud Investment

Cloud environments are scalable and allow agencies to provision resources as required, ondemand. 13 Consistent with the Cloud First policy, agencies shall use cloud infrastructure where possible when planning new mission or support applications or consolidating existing applications. Agencies should take into consideration cost, security requirements, and application needs when evaluating cloud environments. As required by FITARA, agencies utilizing cloud services shall do so in a manner that is consistent with requirements of the Federal Risk and Authorization Management Program (FedRAMP) and National Institute of Standards and Technology (NIST) guidance. 14 Shared Services Managing Partner To support the shared services efforts described by this memorandum, the General Services Administration (GSA) Office of Government-wide Policy (OGP) shall serve as the managing Data centers certified by GSA OGP as Inter-agency Shared Service Provider data centers are excluded from this development freeze.

This requirement does not apply to GSA OGP designated inter-agency shared services data centers.

Federal Cloud Computing Strategy, February 8, 2011, https://www.whitehouse.gov/sites/default/files/omb/assets/egov_docs/federal-cloud-computing-strategy.pdf.


See FY2015 NDAA Sec. 834(3)(c).

partner of the Federal Government’s data center line of business 15 and data center shared services. OGP, in consultation with the Unified Shared Services Management office, shall establish and maintain a data center shared services marketplace and coordinate shared services

for inter-agency consumption by:

• Coordinating with OMB to define qualifying operating standards for inter-agency shared services providers, creating guidance materials for becoming such a provider, and identifying and approving candidate providers.

• Maintaining and monitoring inter-agency shared services provider operating standards.

• Maintaining an online inventory of qualified inter-agency shared services providers.

• Establishing an online decision support tool to facilitate agency review, selection, and analysis of inter-agency shared services providers.

• Coordinating with the GSA Federal Acquisition Service (FAS) to create and maintain an inventory of acquisition tools and products specific to the technology and services surrounding data center optimization, including procurement vehicles for the acquisition of automated infrastructure management and monitoring tools.

• Developing, implementing, and maintaining financial and service models, as well as contracts, pertaining to data center procurement with customer/partner agencies and shared service providers.

• Providing a forum for participating and interested agencies to discuss the inter-agency shared services marketplace.

In this role, OGP will serve as a trusted agent and subject matter expert to assist data center providers and consumers of data center services by providing guidance on technology advancements, innovation, cybersecurity, and best practices.

All agencies will have the option of submitting data centers of their choosing for review by OGP.

Data centers that OGP determines satisfactory in all of their operating standards will be designated as inter-agency shared services providers.

Optimization of Physical Data Centers Classification of Physical Data Centers For the purposes of this memorandum, rooms with at least one server, providing services (whether in a production, test, staging, development, or any other environment) are considered data centers. However, rooms containing only print servers, routing equipment, switches, security devices (such as firewalls), or other telecommunications components shall not be Formed in 2004, lines of business (LOB) are cross-agency initiatives to define, design, implement and monitor a set of common solutions for government-wide business functions, processes, or desires capabilities. Each LOB is governed by a Managing Partner which is designated as the lead organization responsible for managing the business requirements of their community.

considered data centers. Agencies shall perform a comprehensive review of their data center inventories and continue to maintain complete and updated data center inventories. This comprehensive review shall be completed by August 31, 2016, to align with the Integrated Data Collection (IDC) process. 16 Data centers shall be categorized into two groups: tiered 17 data centers and non-tiered data centers. Tiered data centers are defined as those that utilize each of the following: 1) a separate physical space for IT infrastructure; 2) an uninterruptible power supply; 3) a dedicated cooling system or zone; and 4) a backup power generator for prolonged power outages. All other data centers shall be considered non-tiered data centers. 18 Private sector-provided cloud services are not considered data centers for the purposes of this memorandum, but must continue to be included in agencies’ quarterly inventory data submissions to OMB.

Agencies shall self-classify data centers as either tiered or non-tiered data centers based on the above criteria; however, any data center previously reported to OMB as a Tier 1-4 data center shall be automatically categorized as a tiered data center.

Under this memorandum, OMB sets closure and optimization targets that are applicable to each type of data center. Additionally, the terms “core” and “non-core” will no longer be used as the categorical benchmarks for OMB oversight.

Energy Metering and Power Efficiency Agencies shall install automated energy metering tools and shall use these to collect and report energy usage data in their data centers to OMB. The March 19, 2015, Executive Order 13693, “Planning for Federal Sustainability in the Next Decade,” requires agencies to install and monitor advanced energy meters in data centers by September 30, 2018. 19 Consistent with the Implementing Instructions for Executive Order 13693 (E.O. Implementing Instructions), energy metering tools shall enable the active tracking of PUE for the data center and shall be installed in all tiered Federal data centers by September 30, 2018. 20 The E.O.

Data centers containing only print servers that were previously reported as “closed” shall remain classified as closed data centers in agencies’ data center reporting.

The term “tiered” and the definitions that follow are derived from the Uptime Institute’s Tier Classification System; however, this shall not be construed as requiring any certification in order for a data center to be considered tiered by OMB.

Data centers previously classified as tiered in past inventories will automatically be classified as tiered under the DCOI.

Executive Order, “Planning for Federal Sustainability in the Next Decade” https://www.whitehouse.gov/the-pressoffice/2015/03/19/executive-order-planning-federal-sustainability-next-decade.

While Executive Order 13693 requires advanced energy metering in all data centers, OMB will monitor PUE for tiered data centers only.

Implementing Instructions also advise that “[a]ll existing and new data centers shall have at least one certified Data Center Energy Practitioner (DCEP) assigned to manage its performance.” 21 Consistent with the E.O. Implementing Instructions, agency CIOs are also required under this memorandum to ensure that existing tiered data centers achieve and maintain a PUE of less than

1.5 by September 30, 2018. Agency CIOs shall evaluate options for consolidation or closure of existing data centers in which a PUE target of less than 1.5 is not cost-effective, such as through transition to cloud services or migration to inter-agency shared services data centers.

Accordingly, OMB will monitor the energy efficiency of data center power and cooling infrastructure through the Power Usage Effectiveness (PUE) metric. Consistent with the E.O.

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