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Cabinet Office gears up to ink mega Oracle deal

How's that plan to break with monopoly suppliers going?

By Kat Hall, 24 Oct 2016

The Cabinet Office is gearing up to ink another mega pan-government Oracle licensing deal, multiple sources have told The Register.

One person close to the matter told us: "Government is supposed to be moving away from big monopolies by big companies, especially expensive ones that operate bully behaviour like Oracle.

"Yet it seems the Cabinet Office is leading plans for a pan government Enterprise Resource Planning (ERP) based on Oracle. In effect, encouraging even more lock-in to Oracle."

He added that the driver behind the deal is thought to be driven by chief exec of the civil service John Manzoni.

The deal will probably take the form of a massive framework run by the Cabinet Office's Crown Commercial Service (CCS), said one source, with corresponding discounts depending on how many licences the government signs up for.

However, software licensing deals are a notoriously dark art.

One source commented that there have been around 10 negotiations with Oracle over the last decade "Oracle largely don’t care. They’re the ones who wrote back to Francis Maude’s request for a discount by saying 'We look forward to seeing your plans for migrating off our products'."

Back in 2012, the Cabinet Office said that all departments should be spending a maximum of £93 per software licence, with a view to reducing that down further to £52.

In 2012 the Cabinet Office signed a three-year pan-government deal with Oracle, which it said would cut £75m with the giant over that period.

According to TechMarketView, the government spent £290m on Oracle licences in 2013.

Another source said: "It makes sense to drive a good deal across government, but only to buy time while the government gets off Oracle. And I'm not sure how much of the latter has happened."

One insider reckoned talk of a deal has been brewing for around six months. He said many departments - such as the Ministry of Defence - were never going to move off Oracle. "So having a deal where all departments get the same price, as opposed to individually negotiated contracts, makes sense."

But many in government have openly expressed their desire to move off Oracle suites. For example, in 2014, then deputy Mayor of London Kit Malthouse hit out against the ERP giant. "Like most people in government, I’ve been screwed by Oracle,” he told the audience at London Technology Week.

Last year The Register revealed that the Ministry of Justice admitted to holding 2.3 million Oracle software licences, while the Department for Environment, Food & Rural Affairs admitted to holding 2 million licences at a cost of £1.3m per year.

The Register has asked Oracle and the Cabinet Office for a comment. ®

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