New State Data Center too large

Report: Consultant says state might need less than 10% of $255M building

January 23, 2011 

State Data Center too large

The construction site of the new $255 million state Department of Information Services' headquarters and data center, shown here in a December 2009 file photo, dwarfs the neighboring homes surrounding it in the South Capitol neighborhood.

STEVE BLOOM — Staff photographer file

OLYMPIA - The new State Data Center project under construction in Olympia is substantially larger than what will be needed to meet the state’s future computer needs, and the excess space could be leased to private businesses.

That is the upshot of a consultant’s recent report. It says that under a high-efficiency scenario the state’s current need for space for information storage and computer operations might be less than 10 percent of the high-cost space being built.

Recent technological advancements allow more processes to be consolidated on computer servers, allowing them to operate more efficiently and handle more work, a process that computing geeks call “virtualization.” In addition, much data storage can be moved from local sites onto “the cloud” at remote data centers in Eastern Washington and elsewhere.

Even at a reduced level of virtualization, the state could get away with using just one-quarter of the available data center space still under construction in the $255 million project just east of the Capitol Campus.

Spokesmen for the Department of Information Services say they all along intended to leave half of the data bays vacant for future needs, but its leaders now are reviewing the report and the agency’s business plan.

“A lot of this was planned for … but technology has leaped forward,” DIS spokeswoman Joanne Todd said Friday.

She said her agency is still exploring how consultants came to the conclusion that the state needs only 4,000 square feet of the 50,000 square feet available in the data center portion of the project, which also includes new headquarter offices for DIS and the Department of Personnel. But she noted that the consultant’s findings were based on a best-case scenario for virtualization that might not be achievable any time soon.

In the meantime, a Seattle lawmaker has called for a timeout on one part of the project, which was meant to bring data storage from 40 sites into a single place. State Rep. Reuven Carlyle – who is a Democrat with a background in software and mobile telephone technology – put language into the supplemental budget bill last week that bars the state from spending money for data center equipment or moving computers into the center until more study is done.

Republicans put similar language into their alternative budget bill, according to Republican Rep. Gary Alexander of Thurston County. “I support the stoppage of the equipment (purchasing) at this time until we find out who is going in there. The plan keeps changing,” Alexander said Friday.

The House budget bill is scheduled for a floor vote Monday. Carlyle said he put in the spending freeze “so we can do a thoughtful analysis of the technology plan … and the business plan. There’s a big question about the business plan.”

Carlyle has been a frequent critic of the project, seeing it as a mistake to invest so heavily in computer server space when so much work is becoming virtualized.

Carlyle asked Gov. Chris Gregoire to halt the project nearly two years ago, but Tony Tortorice, the DIS director at the time, concluded after looking into the matter that the project should go on.

Alexander said he is not yet able to say the project is a mistake. But he welcomes the possibility that the state might contract out for some data center operations, as well as lease out its excess capacity. He said state IT spending is a ripe area in which to look for cost savings.

Democratic Rep. Sam Hunt of Olympia used to work for DIS and was involved in past efforts to get a new data center. But he said he was “disturbed” to learn that only a fraction of the space might be used.

“I’m sure there will be a lot of finger pointing and people hiding behind trees. I am baffled by this, having worked on the project since 1991,” Hunt said. “How did we let this happen? Technology didn’t change that fast.”

The data center report was done by Excipio Consulting LLC at the request of Carlyle in previous legislation. It found the state needs less than half of one of the large data halls included in the project, but it also outlines use of a second hall to handle small-agency data storage separately.

The project has four halls of 12,500 square feet each, and DIS plans to fully equip two of them. Excipio has recommended the state find private-sector firms willing to invest the $60 million to $70 million needed to build out halls 3 and 4 and then lease them to other private enterprises that could also manage some of the state’s data needs.

Todd conceded there may be more unused space than anticipated just three years ago when plans were finalized. But she said the agency all along had intended to leave two data halls vacant until the demand for information storage required them.

She also said the sizing of the project was reduced by 10,000 square feet on a consultant’s advice in February 2008 when project plans were being drawn. Tortorice, who retired last year, had double-checked the conclusions at Gregoire’s request a year later.

Since the planning, virtualization technology “has exploded,” Todd said.

Todd said the consultant’s suggestions do offer an opportunity for private-sector involvement at the site.

“Because the technology has come so far in a very short amount of time, clearly we can use this in different ways to benefit the state and help taxpayers to bring down the agency cost,” she said.

But she said the potential commercial or private sector use “needs to be marketed.”

Todd also said the budget proviso – if it passes in the final supplemental budget – would not interfere with DIS’ plan to take over the building from developer Wright Runstad in July. The agency would reshape its plans for using the excess space after that.

Also, plans to relocate the state’s main data center from the basement of Office Building 2 on the East Capitol Campus to the new building are not scheduled to begin until mid-2012 or January 2013, according to the consultants.

The state has a 30-year lease-to-own agreement for the new building and a guaranteed maximum cost.

Todd said legislators’ call for a timeout also does not interfere with other plans to move personnel from three state agencies into the nearly 260,000 square feet of high-grade office space starting next year.

Todd noted that the project is running ahead of schedule and more than $30 million below budget.

See also: Large, costly Data Center won't be cheap for tenants

Brad Shannon: 360-753-1688

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