Costs prompt state to close data center early

Overcrowded resources at Office Building 2 will transfer to $262 million State Data Center

bshannon@theolympian.comJuly 21, 2013 

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

In a switch of strategy, state government now plans to completely shut down one of its major data centers in Olympia, merging data-processing from that older facility into a $262 million State Data Center and office building complex built two years ago near the Capitol.

The data center portion of the new complex has been considered vastly overbuilt by critics including a consultant hired in 2010. That view has also been held by the Consolidated Technology Services agency that was created in 2011 to operate the center.

CTS retained a broker a year ago to look for potential private-sector tenants willing to invest in completing two of the state’s four data halls and then to use the excess space.

The state has no reasonable expectation of ever using the two unfinished halls, even as reserve space, because virtualization and other recent computing advances have drastically shrunk the state’s future needs.

But until the state Office of the Chief Information Officer’s new report came out this month, CTS was planning to transfer just half of its data-storage and processing equipment out of its overcrowded basement locale in Office Building 2 — east of the Capitol — and moving it into the new data center.

“It’s cheaper for us to move out of OB2. This report formalizes that business case analysis,” Rob St. John, director of CTS, said in an interview last week.

A year ago the plan had been to move only data-handling capacity as old equipment wore out and new investments had to be made. But the analysis by Chief Information Officer Michael Cockrill’s staff said the state faces a pretty hefty investment — about $32 million — just to keep operations going inside OB2 over the next five years.

The new approach will cost about $9 million in the short term but overall is expected to save money, according to Cockrill.

“The state will avoid a net $23 million in expenses over five years by only operating one central data center instead of two,” Cockrill’s report states.

The plan calls for shutting down all data activities in Office Building 2 by June 2015 and moving all of its operations into the new State Data Center by that date.

As outlined by the plan, moving all of the computing power out of OB 2 into the State Data Center at 1500 Jefferson St. should fill all of one fully outfitted hall and 40 percent of a second hall. That will leave 60 percent of the second hall to handle data center operations that still function in about a dozen other locations around Thurston County and that would be migrated into the SDC “as soon as business benefits allow,” the report says.

Despite attempts to market the unfinished space in halls 3 and 4, CTS and its broker have had only nibbles and no serious interest. Cockrill’s report says the state will launch a new marketing project “to engage government and business leaders to identify innovative uses for this space.”

The expense and size of the State Data Center have been touchy subjects since Excipio Consulting LLC evaluated the completed facility in December 2010 and determined the state had use for only 10 percent of the $180 million data center portion.

That consultant’s report verified criticism launched in 2009 by Democratic state Rep. Reuven Carlyle of Seattle, who had asked then-Gov. Chris Gregoire to reconsider the project and halt or revise it.

Gregoire did ask her director of information services at the time to review the state’s assumptions but the project steamed ahead.

And Carlyle, who had demanded the study in 2010, found his criticisms were vindicated.

At the time, Excipio 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.

This led to a business plan and CTS’ effort last year to market the excess space.

In one somewhat desperate move, CTS even tried to interest Secretary of State Kim Wyman in the space for use as an archive for state records.

Last week, CTS Director St. John and the Office of the Chief Information Officer put out a statement clarifying the costs of the data center and office-building complex, which houses the Department of Enterprise Services. They say the total construction budget for the multipurpose facility is $262 million and includes $134 million for the Data Center and Data halls 1 and 2.

They estimated the cost for constructing the below-ground shells for data halls 3 and 4 was just $20 million, which they say was put into the project at a “fraction of the cost” of a finished hall.

That would appear to put the entire cost of the data center investments at closer to $154 million — far less than project planners have said in the past.

“Halls 3 and 4 were originally meant as a way for the state to manage risk if more space would be needed in the future,” the statement said. “With the state’s adoption of technology innovations, we’ve been able to avoid increases in space and energy use even as demand for computing resources continues to rise. The result is that the additional space is not needed at this time.”

Brad Shannon: 360-753-1688 @bradshannon2

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