UK.gov embraces Oracle's cloud: Pragmatism or defeatism?

Home Office happy as Larry

Analysis Oracle recently launched its dedicated Government Cloud in the UK - duly wheeling out the Home Office as an example of an early adopter. But to what extent are its new services just vendor lock-in under a cloudwash veneer or a change for the better?

The size of Oracle’s footprint has loomed large across government for many years, and despite some efforts to address inconsistent licence pricing and renegotiating agreements, there has been no major "conscious uncoupling" from the database giant.

In fact the Cabinet Office was poised to sign another massive pan-government Oracle licensing deal, multiple sources have told The Register.

The total cost of government Oracle spend was £290m in 2013, according to analyst firm TechMarketView. It's not known what the latest figures are, but insiders reckon it hasn't changed much in the last four years.

Meanwhile, the way licences operate seems opaque. In 2015 we revealed the Ministry of Justice holds 2.3 million Oracle software licences, while the Department for Environment, Food & Rural Affairs admitted to holding 2 million at a cost of £1.3m per year.

Yet some have dared to suggest that while dipping its toes in Oracle’s cloudy waters isn’t exactly a radical move, it might be a start in the right direction, by modernising the Oracle environment and cutting down maintenance costs.

Cutting out the middlement

Oracle’s Government Cloud includes software-as-a-service products such as Fusion, which requires existing Oracle customers to modernise their existing Oracle workloads. So as long as users have an internet browser, they can access the product.

Under this model, there will be no infrastructure costs, and no dedicated teams of system integrators fixing it. So while it won't dent Larry Ellison's yacht budget, it could at least potentially cut costs by removing the middle layer of system integrators. In theory, at least.

The service is fully maintained, updated and patched, but all under the service costs, said one source. “But like legacy, it’s not easy to leave and go to another provider, after all: the data might be yours, but the rules and logic by which the service works belongs to the service provider.”

Some are also seeing this as a means of sidestepping the Cabinet Office’s failing shared services centres, intended to shift all departments' back office Enterprise Resource Planning licences into just two shared services centres.

Despite going for at least five years, the government’s spending watchdog has said they have failed to save money, with a number of departments having dropped out of the centres. The two privately run centres originally promised to save between £400m and £600m in back office IT savings, expected to be derived by ensuring lower cost ERP.

Just how Oracle’s Government Cloud fits in with the broader shared services strategy seems unclear. One source said there is a top-down initiative for every department to get their back office in the cloud, which is why the Home Office is testing Oracle. Another said the Home Office deal was a significant move, and amounted to a rejection of the Sopra Steria-run Shared Services Connected Limited (SSSCL) centre if favour of a direct Oracle SaaS offering.

A Home Office spokesman said the department will continue to have a contract with SSSCL. "We will adopt Oracle Cloud technology to replace our Enterprise Resource Planning System, for use both by the Home Office and SSCL when they provide us services.

“This will enhance our functional capability at a lower cost to the tax-payer.”

Lovers and haters

Mike Parsons, director general at the Home Office, was certainly positive about plans.

In an Oracle release he was quoted as saying: "The security of our data is of paramount importance to us. The solution Oracle has built for us is delivering the security we need, meaning we can confidently begin to move away from our existing on-premise infrastructure and realise the benefits of hosting our business-critical data in the public cloud."

Others remain less impressed and perceive a lack of ambition by departments choosing to stick with and endorse a corporate giant. One insider said: "Oracle's business model is anti-commodity. It goes in with a bespoke product and keeps raising costs."

Another said: “The fundamental premise is wrong - government is locked into Oracle for its high volume, difficult back end legacy services." He said he was sceptical about that legacy to the cloud.

“It’s never going to move those to any cloud or anything else; they have to rebuild them and then they can pick any tech they want.  If they want to pick an HR platform to move to, they could pick anyone of those too, on [the] basis that they have to do the transition to any platform. Why move to an Oracle one and be locked in?”

From Oracle’s perspective, it certainly makes sense to market its cloud services to the public sector; the database giant has been somewhat of a laggard in the cloud space. And in typically bombastic style, Ellison had previously said AWS’s lead is over.

By positioning itself as a enabler of cloudy services for government, Oracle will be hoping it will help off see the impending threat posed by the likes of AWS.

How mutually beneficial that bet is to both parties remains debatable. ®


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