Oregon Public Broadcasting

State governments across the country are making big changes in their IT departments. They're centralizing their own state data systems in a push to save money. 

The state of Washington is building a $300 million data center in Olympia.

Oregon undertook a similar project a few years ago, but it's been criticized for failing to produce the promised financial savings.  In part three of our series The Data Center Debate, Chris Lehman found lessons from Oregon.

The State Data Center is a generic looking office building on the edge of Salem.  Inside are the digital nerve centers of ten state agencies, including Human Services, Corrections and Transportation. 

Row upon row of computer servers line the inside of Oregon's State Data Center in Salem.

This mammoth information repository is so sensitive, you can't get very far before you get to something that operations manager Brian Nealy calls the "man-trap". 

Sound: (badge scanning, door unlocking)

It's kind of like an air-lock -- you have to clear one set of doors before you can get through the next set.

Bryan Nealy:  "You'll notice there are card-readers on every door in the secure part of the data center.  That way we can give people access only to the areas they need to go into.  It's very granular as far as where people can get.  This is the command center.  This is manned 24/7, 365." 

Another badge swipe, another set of doors open -- and we're standing in the heart of it all.  The first thing you notice?  It's loud in here.

Sound: (fans)

You know that hum your desktop computer makes?  Imagine what the combined computing power of tens of thousands of PC's sounds like.  Now think about how hot your computer would get if that tiny fan inside stopped working.  And now you understand what's making all that noise.

Brian Nealy:  "In general, in data centers, it costs an equal amount to cool the equipment as it does to power it.  So reducing the number of physical machines you have has a significant impact on your power bill on an ongoing basis."

Three years after it opened, data managers are still trying to reduce the number of physical machines at the Oregon Data Center.  That ongoing work is one of the reasons Data Center director John Koreski concedes the facility isn't on track to meet the original goal of saving the state money within the first five years.

John Koreski: "It's not even close."

Koreski says the original business case for this $63 million facility made assumptions that turned out to be impractical.

For example, planners figured they could combine servers from different agencies just by putting them under the same roof.  But that's not what happened.

Koreski says you can't do the two things at once:  physically move the servers and combine their functions.

John Koreski:  "We decided that that probably was too risky an approach to take.  And so the decision was to move from a 'lift, consolidate and drop' to a 'lift, drop and consolidate over time.'  So that's what we've been involved in since we moved here in 2007."

And that change has meant the economies of scale haven't materialized as fast as once thought.  Koreski took the reigns of the Data Center in January.  His predecessor left after a scathing audit from the Oregon Secretary of State's office last year.  It said, "it is unlikely that the anticipated savings will occur".  But director Koreski insists the Data Center is saving the state money.

John Koreski:  "What our consolidation efforts resulted in was a cost avoidance, as opposed to a true cost savings where we actually wrote a check back to the Legislature."

In other words, Koreski says the Data Center is growing its capacity at a faster rate than it's growing its budget. 

That explanation computes for at least one analyst.  Bob Cummings works in the Legislative Fiscal Office.  It's his job to make sure the numbers add up for major state technology projects. 

He jumped into the Data Center fray as soon as he was hired last summer, and what Cummings found shocked him.

Bob Cummings:  "It was the right thing to do.  However, the rationale for doing it, and the baseline cost estimates and stuff and that for doing it, were all bulls--t.  They were all wrong.  They were all low."

Cummings says the state of Oregon failed to take into account one key detail.  Washington already had a data center and is building a bigger one.  In Oregon, no one with the state had ever run a Data Center before.

Bob Cummings:  "I mean, we had to build everything from scratch.  And by the way, we did a great job of building a data center but didn't have anybody to run it, didn't have any procedures, no methods. We outsourced to a non-existent organization."

Oregon Department of Administrative Services Director Scott Harra echoed this in his response to the Secretary of State's audit. 

Harra wrote that the consolidation effort was hampered because it required skills and experience that did not previously exist in Oregon's state government. 

After last year's audit, Democratic State Representative Chuck Riley led a hearing that looked into the Data Center.  He says he's convinced Data Center managers are saving the state money.  But....

Chuck Riley:  "The question is, did they meet their goals.  And the answer is basically no, they didn't meet their goals.  They over-promised."

And that's the basic message Riley and others have for developers of Washington's data center.  Keep expectations realistic.

Online:

Oregon's State Data Center

Secretary of State Audit on Oregon's State Data Center