back to article Government locked into £330m Oracle contract until 2016

The Home Office is locked into a £330m mega-contract with Oracle and Fujitsu until 2016 – despite recent moves to slash costs by shifting its ERP system into a shared services centre run by French mega-integrator Steria, according to a Freedom of Information response. The contract was signed in 2009 for an Oracle E-Business …

  1. James 51

    If a minister had to start his weekly interview on newsnight with 'We're having to waste £x million this year on legacy contracts with X, Y and Z' I wonder how much longer that would continue.

    1. Anonymous Coward
      Anonymous Coward

      "The Home Office is locked into a £330m mega-contract with Oracle and Fujitsu until 2016"

      So - erm - for potentially less than a year then?

  2. Otto is a bear.

    Not surprised.

    There has been an unhealthy rush by government to exit Oracle contracts, because they are expensive, and Oracle hasn't been that helpful to the government in cost reduction.

    The government has probably signed a lot of long term Enterprise agreements based on large numbers of licences attracting heavy discounts, and now they are exiting and consolidating these agreements, they are breaking the terms of the deals, and Oracle are recalculating their support agreements, you don't get the same discount on 75 licences, that you did on 100. In fact, it may well be that the new support agreements turnout more expensive than the old.

    Add to that the fact that when moving from one ERP to another, you need to parallel run for a while, you can't just shut one down and start the other, and the likely hood that this wasn't costed by the Home Office or their contractor, it isn't much of a surprise.

    The only way you can be sure that your Oracle costs will really drop, is by exiting all Oracle contracts at the same time. Don't forget Oracle have absolutely no incentive to be nice in the current climate. Oh and don't think SAP or Microsoft would behave any differently. At the moment HMG are probably falling into the arms of Microsoft, with even bigger deals.

    Oracle needs badly to modernise its licence model for everybody, but it's a tough job for them, how do you tell your shareholders you need to cut revenue to survive. They need to support a much larger low end product base, rather than severely limiting it, so you have to move to Enterprise products at a ridiculously low level, and then gain loads of functionality you don't need. The Standard editions are way cheaper and easily capable of supporting most applications.

    1. Anonymous Coward
      Anonymous Coward

      Re: Not surprised.

      "There has been an unhealthy rush by government to exit Oracle contracts"

      Ditching Oracle is never unhealthy.

      1. Anonymous Coward
        Anonymous Coward

        Re: Not surprised.

        ..yet people seem to consistently underestimate the huge complexity involved moving away from an ERP platform used by 100000s..

        1. pandafinity

          Re: Not surprised.

          Not being funny but moving away from an ERP platform is pretty straight forward - as you are simply replacing one piece of software the 100,000s of people are using with another. Same integration points apply, and helping users train to use another piece of software that has the same functionality is pretty easy.

          I've helped companies move ERP systems with no problems - its simply down to managing the transition.

          Though I appreciate most in Government are muppets....

          1. Roland6 Silver badge

            Re: Not surprised. @pandafinity

            Reading both this and your previous comment on this thread, I could be mistaken, but it does seem you are tentatively pitching a business idea.

            I suggest, given your claimed experience and knowledge, you should go for it and head over to a crowd funding site of your choice and see if you can get some backing to help you off the ground...

  3. Ken 16 Silver badge
    Trollface

    "save up to £600m per year in savings"

    and instead they're spending it in spendings?

  4. Andy The Hat Silver badge

    and instead they're spending it in spendings?

    No, don't be silly that would not be planning for the future correctly.

    As we all know, they've probably got a consultant in (at £extortionate) to *tell* them they can spend it in spendings but not until *after* the election so that's a saving by this government and 'planning for the future'! And of course, not only do they shaft the incoming governments finances but what they could have saved long term will be more than offset by the spendyness of the consultants and the pocketing of directors fees by ex-ministers ...

    1. Ossi

      @ Andy The Hat

      I'm not sure if you missed the point of the above comment or not...it wasn't a political comment.

  5. Jungleland

    It is called

    Double Entry accounting. That is where a company gets to put 2 lots of large numbers in the income column for the same product/service.

    Generally it is part of a Government Framework that goes out for tenders every so often.

  6. alain williams Silver badge

    The public sector spent £290m in 2013 with Oracle

    If they put 10% of that into sponsoring open source projects I wonder how long before they have a royalty free suite that does what they need ? Run it on top of Linux using PostgreSQL, etc, and the bills would drop.

    OK: open source projects will not do exactly what is needed, so pay FLOSS hackers to write the code and release it under the GPL. This code could be used/shared by different government departments, by industry and even other governments[**].

    Do they not think that this is what Oracle is doing ? Write the code once and then implement it many times at different customers ?

    I do realise that requirements will change, so any solution will need maintainance. I also realise that different use cases will have different detailed requirements, but well designed core components will be able to be reused.

    [**] Hmmm, the thought of helping the French might put the kibosh on this :-)

    1. Anonymous Coward
      Anonymous Coward

      Re: The public sector spent £290m in 2013 with Oracle

      Unless you're going to have Open Source ERP applications you're not going to save much. This isn't really about O/S and DB licences.

    2. d3vy

      Re: The public sector spent £290m in 2013 with Oracle

      Not all of the cost of a product is for the product itself.

      They would still need support for the product the cost of which increases with the user base, hardware for it to run on, which again, needs to be supported at a cost.

      Of course they KNOW that that is how Oracle/SAP etc will be working, thats how these companies can offer the product at a cost that is lower than developing it in house.

      Not saying that your idea doesn't have merit, but its not as cut and dried as "Lets just write it ourselves" it will be cheaper.

    3. Anonymous Coward
      Anonymous Coward

      Re: The public sector spent £290m in 2013 with Oracle

      does what they need ? Run it on top of Linux using PostgreSQL

      You're kidding, right? Do you have any idea of the performance requirements here?

      1. FlatSpot
        Trollface

        Re: The public sector spent £290m in 2013 with Oracle

        Careful, you are playing with a greater spotted reg armchair commentard. They have vast knowledge of running systems with thousands of nodes and millions of database transactions a day and could easily run this database on a Raspberry Pi and have room to spare.

      2. razorfishsl

        Re: The public sector spent £290m in 2013 with Oracle

        Yes quite right.... filemaker is more than enough.......

    4. iOS6 user

      Re: The public sector spent £290m in 2013 with Oracle

      "If they put 10% of that into sponsoring open source projects I wonder how long before they have a royalty free suite that does what they need ? Run it on top of Linux using PostgreSQL, etc, and the bills would drop."

      You are a dreamer. Oracle on some Solaris kernel space projects has more highly skilled developers than Sun had working on whole Solaris.

      10% of 290mln it is about 29mln. It is maybe money necessary to hire maybe up to 30 highly skilled developers (each one must have few other less skilled people around + management + taxes + pensions).

      Without licensing results of the work of these guys such business will not sustainable and will collapse on first cost cutting.

      If you will look on what Oracle delivers from a little further distance you must agree that from technological point of view Oracle on background of Open Source and other companies still is doing extremely well.

    5. Anonymous Coward
      Anonymous Coward

      Re: The public sector spent £290m in 2013 with Oracle

      PostGreSQL?! Cant say I have seen any appropriate examples of scaling to tens of thousands of concurrent users - and / or hundreds of thousands of requests per second for that - Do enlighten us if you know otherwise?

      Something like this perhaps? http://www.microsoft.com/casestudies/Microsoft-SQL-Server-2014/TPP/Clinical-Software-Easily-Supports-Thousands-of-New-Users-and-Helps-Doctors-Save-Lives/710000003430

      1. Gorbachov
        Facepalm

        Re: The public sector spent £290m in 2013 with Oracle

        You mean like Skype?

        http://highscalability.com/skype-plans-postgresql-scale-1-billion-users

        Or this bank in Brazil:

        http://wiki.postgresql.org/wiki/90ReleaseDraft#Quote_from_Caixa_Bank

        The reason Oracle has such a presence is because most non-web enterprisey software is written in Java and most Java people develop for Oracle. It helps that their DB is quite good.

        That said, the OP is being silly. These prices are mostly for doing the integration work and connecting various pieces into a working system, not for licences. Even if you used FOSS building blocks you would spend at least as much on replicating all the functionality. There is an argument to be had for not being locked in to an ecosystem but either way you end up with a giant mess that's difficult (=expensive) to maintain.

  7. Anonymous Coward
    Anonymous Coward

    More wonderful New Labour spending. 2009 was in the recession years too, how could they afford to spend that amount?

    1. Phil O'Sophical Silver badge

      how could they afford to spend that amount?

      Easy, it wasn't their money.

  8. Anonymous Coward
    Anonymous Coward

    pah peanuts

    compared to the "Free" OAP bus pass which cost's £1Bn a year to fund and has lead to the loss of countless rural buss routes and the closure of numerous bus companines

    1. James 51
      Boffin

      Re: pah peanuts

      Don't normally feed the trolls but I would like to know how encouring OAPs to use buses has lead to the closure of numerous routes and bus companies.

      1. Anonymous Coward
        Anonymous Coward

        Re: pah peanuts

        Perhaps the government only pay a set amount for each journey, resulting in buses losing money?

        Much like the government only pays a certain amount for a resident of a care home, usually £420 a week, meaning that there's pressure to not have prices much higher than that amount.

  9. Roland6 Silver badge

    Oh look the El Reg tune has changed!

    Isn't this contract one of the bundle of 'legacy' contracts with Oracle that were renegotiated back in 2012 with a view to consolidation of IT into shared service centres and was claimed would generate savings in excess of £75m by 2015? [ http://www.theregister.co.uk/2012/03/28/cabinet_office_oracle_deal/ ] and was regarded as being a good deal for UK government.

    Kat Hall hasn't presented any evidence or made a case for why the government being locked into this specific 'legacy' contract is a bad thing.

    1. Anonymous Coward
      Anonymous Coward

      Re: Oh look the El Reg tune has changed!

      The Oracle deal was done to give them time to transition to the shared service centres and out of these type of contracts without all the upgrade costs from 11.5.10 to R12 and then into a shared service centre. The question is how long do they need to make the transition and was it long enough to avoid the costs of the middle step.

      And whether the shared service centres can handle it too.......

  10. Dodgy Geezer Silver badge

    A slight addition.

    ...the centres could save up to £600m per year...

    ...where the words 'up to' clearly include the figure '£0'...

  11. pandafinity

    Where's the Common Sense?

    It never ceases to amaze me how much money is wasted by the Government when dealing with IT.

    The Business Link website cost about £35 Million a year to run when it was around, Ministry of Defense Procurement has wasted Billions in procrastination and buying kit it never uses. ....and Now the Government spent £330 Million on an ERP system in a year.

    Who ARE these very very stupid people?

    As someone that has implemented over a dozen multi-site ERP systems for MNCs and had an ERP Implementation book published I can tell you it would be cheaper and easier for the Government to set up a Government IT Consultancy to build their very own ERP system. One that didn't need customising from a Vanilla implementation or shoe-horned in. ERP systems are actually quite simple once you understand them - and if someone actually built one using NoSQL & BigData they would make ALL big ERP companies such as Oracle obsolete.

    How much money would the Government actually save if it looked at its need with common-sense and proper understanding?

    1. Anonymous Coward
      Anonymous Coward

      Re: Where's the Common Sense?

      Ye had me until your stupid NoSQL comment.........

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