Cornwall councillor suggests authority paid £2m for Oracle licences that no one used on contract originally worth £4m

The local government of England's westernmost county, Cornwall, has become embroiled in a row about an apparent overpayment of licences to the tune of £2m on an Oracle Cloud ERP migration worth around £4m to the vendor when the contract was signed in 2017. Cornwall Council, headquartered in Truro, has been running Oracle E- …

[Flak]

Information and Experience Asymmetry

This happens regularly for large and complex procurements:

Veteran seller who has been playing the game for years and sold complex solutions in the red corner vs. the newly promoted customer representative on their first complex technology procurement in the blue corner.

Hardly a fair fight.

And that is how you get situations like this one.

(Disclaimer - I don't know the details of this case and they may well be different from the above scenario)

[Anonymous Coward]

Re: Information and Experience Asymmetry

You forgot to add -

Red corner will promise that their software can meet all of blue corner's requirements.

Red corner will use every change, no matter how small (and all contracts will have them) to demand a contract mod with an increase in cost (and probably due dates).

Disclaimer - none. This is reality.

[Anonymous Coward]

Re: Information and Experience Asymmetry

I know of a consultancy where Change Control was the way to actually make *real* money on a contract that was deliberately originally underbid.

That's what you get when you allow the contracted party to also "independently" draft the contract and the delivery criteria. I'm pretty sure the partners involved must have had a good laugh before they proposed it in jest, and a bigger laugh in the pub later after that was accepted. much to their astonishment.

Oh, and the project never delivered, naturally after burning through millions.

[Anonymous Coward]

Re: Information and Experience Asymmetry

It's almost like these so-called professionals have no understanding of suppliers "pulling a fast one".

[trevorde]

Cheaper option

Than wrangling with Oracle's licencing team :-(

[Anonymous Coward]

Oracle and SAP should be banned in the public sector

When have they *ever* delivered value for money...?

[Spanners]

Re: Oracle and SAP should be banned in the public sector

When have they *ever* delivered value for money...?

That is not generally the function of a US corporation. It is supposed to generate "returns". This is why when small US firms grow big, they change from being useful to not - Microsoft and Google are good examples of that.

[Anonymous Coward]

Re: Oracle and SAP should be banned in the public sector

You ought to be careful with accusing especially Microsoft of being useful. I think that fell by the wayside around Windows Ce/Me/NT :). They may sue you for that.

/s

[Spanners]

Re: Oracle and SAP should be banned in the public sector

I agree about the time. I remember the "example" of Windows Cement which I had printed out and on my wall.

I think NT was the start of the downfall. They now seem indistinguishable from any other so many other US corporates.

[TVU]

Re: Oracle and SAP should be banned in the public sector

"When have they *ever* delivered value for money...?"

They do delivery very good value for money...but only for Litigation Larry and the other senior executives.

[logicalextreme]

Re: Oracle and SAP should be banned in the public sector

Spending a quajillion pounds on broken systems is kinda what the public sector does, though. Taking SAP and Oracle away would be like depriving it of food, and depriving us of snark.

[Scott 29]

Byzantine Oracle licensing

Trying to figure out exactly what licenses you need to buy is a good way to give yourself a headache, when it comes to Oracle licensing.

[Keith Langmead]

Re: Byzantine Oracle licensing

Same with MS licensing. MS insist you must have correct licensing, yet refuse to confirm whether what you have is correct and direct you to one of their licensing partners. Licensing partners will advise, but also refuse to warrant that what they've told you is correct and that you're properly licensed.

[Anonymous Coward]

pah only a waste of £2M thats less than half the council have spunked on a new office building for the Tamar bridge!

Also Cornwall is a Duchy not a county

[Anonymous Coward]

No one cares.

[Pascal Monett]

"this is standard practice"

I'm sorry, since when is it "standard practice" to waste money ?

Oh, we're talking about government. UK government. In an IT project. Right.

Sorry to bother you. I'll just exit stage left.

[iron]

Since when was it standard to pay for software that is in development? By definition you can't use it yet because it is not ready.

What if the project never leaves development and you never get to use it? Are you supposed to pay for this unused Oracle software forever?

[Steve Davies 3]

re: Are you supposed to pay ... forever?

Doh.

Yes, you are supposed to pay and pay and pay.

That is the whole point about making software licensing an inpenetrable maze of conditions and contradictions.

Oracle and Microsoft (and others too numerous to mention) are past masters at this are many organisations around the world have found out to their cost time after time.

You would have thought that people would have learned this by now but apparently not.

[logicalextreme]

You answered all of your own questions three words from the end of the final one.

[JimC]

A number of posters here...

...have clearly had zero experience of large organisation software licensing and the byzantine complication thereof. But ultimately all that counts is the bottom line. Hopefully you get the license cost, however ridiculous or frustrating or just plain unfair its basis (at least two, quite possibly all three) beforehand and build it into your business case. After that its just another number in the project. And you think, yeah, if we'd spent six months arguing about the licensing and understanding ir properly maybe we could have saved umpteen thousand quid, but the delay to the project, the time spent arguing, not to mention all the staff effort spent and all the rest would have cost us a damn sight more, so WTF would be the point?

[Cederic]

Re: A number of posters here...

Agreed. On top of that, Oracle licence costs are entirely irrelevant: what matters are how much money your organisation transfers to Oracle, and how much of that money the sales team can (legally) siphon off in commissions.

If the £2m hadn't gone on cloud licences other Oracle products would have been needed, or would have been discounted less, or would have been discovered running unlicenced... that £2m was gone anyway.

[Anonymous Coward]

Have I read this right? They paid £4m for £2m worth of licenses but are happy to announce they've saved £370k. Not being particularly sarcastic here but just wondering....

[Cynic_999]

Politicians do that all the time. And wives. "I needed a new pair of shoes. The ones I liked were £500 a pair, but they were selling 2 pairs for £900 so I've just saved you £100!"

[Anonymous Coward]

It's Cornish math.

LOL

[Anonymous Coward]

AC because..you know ..reasons

the problems with local council IT and a lot of public sector is that the wages are so low, they either get people at the start of their career or people at the end waiting for the retirement check to come through.

anyone with ANY sense wouldn't let Oracle within 100 miles of their server room however, these guys always fall for the sales pitch.

it IS getting better though. The Crown Hosting data centres have saved the government/local govt etc a LOT, and I mean a LOT of money in the range of several hundreds of millions by moving away from individual server rooms and the crappy contracts these IT managers for local govt sign because they don't know any better to proper massively procured data centres.

[Roland6]

Re: AC because..you know ..reasons

The data centres aren't the problem here... The problem was how long it has taken UK government to wake up to the benefits of centralised procurement of widely used IT platforms.

The trouble however with such centralised procurement is the tendency to block change. So they buy MS, Oracle, Dell, Cisco etc. and make it much harder to both sell into government and for individual branches of government to select other products, such as those based on Open Source...

[logicalextreme]

Re: AC because..you know ..reasons

Yep, the sales pitch normally seals it — every time I've pointed out to anybody the absolute litany of articles, forums and comment sections clearly displaying that Vendor/Software X is literally regarded as a joke among the tech community (and a bad one at that), it's too late because the pitch has been successful. Hell, at my last job we figured out that SAP hadn't even been honest about the product with their own sales staff — presumably some sort of plausible deniability nonsense that had them covered from all angles.

[Anonymous Coward]

Re: AC because..you know ..reasons

trouble is with oracle is you land up with complex systems running on it which would prove very expensive and difficult to migrate off, so its just the path of least resistance. Another council, VERY close to Cornwall have an oracle cluster running software for critical council services and to move it off to SQL would be a nightmare job so they keep with oracle and the robbing licensing

[czechitout]

"It was a requirement that the Council was licensed for Oracle Cloud throughout development and implementation phases, and this is standard practice"

This certainly isn't my experience. If you are migrating from Oracle on-prem to cloud they will give you one solution "for free" until the migration is complete - so you are not paying twice.

They actually use this in their sales pitch versus moving to one of their competitors.

[Anonymous Coward]

Local Govt are *always* ripped off buying IT !!!

czechitout,

"They actually use this in their sales pitch versus moving to one of their competitors."

This is just one example of the many 'Sales Pitches' that may be used.

It would appear the Cornwall Council Procurement Dept was seen as being a little 'Green' and they got away with the 'License it now .... while we develop the new system' sales pitch.

'License it while implemented/deployed' is OK ..... but the 'license while developed' line is subject to some debate as the full number of users will not be in use.

This of course depends on how much you debate with Oracle/MS/etc and how much they want your business. :)

Hint Number 1.

Always negotiate at month-end / Year-end etc when sales are wanted more and 'maximum flexibility / invention' rules in all sales persons hearts !!! ;) [Ke-ching !!!]

[Claptrap314]

What does the party matter?

I'm about as from from an LD as you can get, but unless they've been making some huge to-do about how competent they are with managing IT contracts, that really, REALLY doesn't matter. Especially since almost certainly everything but final oversight was handled by careerists.