Treasury CIO: Fewer data centers mean smaller budgets

A federal directive to cut data center costs will likely result in a culling of the contractor workforce, said Michael Duffy, Treasury Department chief information officer and co-chair of White House-led Federal Data Center Consolidation Initiative.

"The budgets are going to shrink. This initiative is not going to result in a lot of new spending. It's going to result in a reallocation and ultimately reduction," said Duffy, while speaking at an Industry Advisory Council event on June 23 in Arlington, Va.

Duffy said that data center consolidation will likely coincide with office-space consolidation. "When you look at an IT budget, the biggest costs are people costs. So, to reach the bottom line there will probably have to be cuts. But we've done the best we can to not cut people--feds, I mean. The burden will probably be disproportionately placed on industry."

According to Duffy there are now 1,100 under-utilized data centers, a number that he says is growing. This problem has agencies looking to data consolidation and possibly hosting more data with private industry. In the interim, however, sensitive information will continue to be housed within the government. 

"I don't think the American taxpayer is ready--I could be wrong, I don't know--but I don't think they're ready to have their tax records stored and monitored by a private company," he said.

Duffy told attendees that he has "a lot of hopes" for the use of cloud computing and virtualization by agencies, but only if security challenges are addressed.

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