Oracle: Cabinet Office Deal to Save Taxpayers £75m

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Oracle aims to break government silos in reduced data contract with Cabinet Office

Oracle has signed a deal with the Cabinet Office that both expect to save UK taxpayers £75 million by 2015.

The agreement looks to further break down silos across central Government, providing a single discount for all departments and opening up bulk buying for cross-departmental purchases. Oracle will also let Government re-use software licenses it already owns. Before today, the vendor was selling differently to separate parts of Government.

“The days of the Government paying different prices for the same goods or services are over – we will no longer sign inflexible contracts that tie the taxpayer into unfavourable terms,” said Francis Maude, minister for the Cabinet Office. “We are pleased to have made these savings with Oracle and expect more deals with other suppliers to follow.”

Oracle is also set to establish a Centre of Excellence to provide services to support the Government’s use of the supplier’s software.

A welcome deal

The Taxpayers’ Alliance said the deal was good news for the UK public, whilst urging the Government to do more. “With huge pressures on the public finances it’s critical that the Government uses its purchasing power to save taxpayers’ money,” a spokesperson said.

“While the public might be cautious about IT deals due to previous disastrous decisions, this looks like common sense from Whitehall. The Government should now look at other areas where this kind of arrangement could deliver further savings for taxpayers.”

The Government believes it will save £140 million this year thanks to IT cutbacks. The Cabinet Office wants to cut overall Government spending by £5 billion in 2012.

The Coalition has also pledged to work more with SMEs, yet the Oracle deal marks another win for one of the Government’s traditional suppliers.

Oracle will be hoping to impress in its Government work, after receiving bad press over a US deal that went sour. In October, Oracle paid out close to $200 million (£125.7 million) in a settlement after a former employee accused the vendor of not delivering on contractual obligations on a 1998 deal with the US General Services Administration.

Larry Ellison’s firm was accused by Paul Frascella of failing to provide information about sales practices, most notably what discounts it was offering other customers. It was also alleged Oracle did not pass better commercial discounts on to Government customers.

Oracle is now being sued by one of its shareholders, who has claimed the company knew it had little chance of winning the legal tussle yet risked increasing the cost of a settlement by continuing the litigation.

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