back to article Oracle throws toys out pram again, tells US claims court: Competing for Pentagon cloud contract isn't fair!

Oracle is pushing America's Court of Federal Claims to rule in its favour and issue a judgment saying the Pentagon erred in its decision to offer its $10bn cloud contract to a single vendor. In its latest filing in the case against the US Department of Defense, database giant Oracle urged the court to stop the DoD from …

  1. Giovani Tapini

    Have big red

    Made sure they hadn't employed or contracted anyone that would give themselves leverage? I don't imagine for a second the two guys had any overall power over the bureaucratic purchasing machine.

    Oracle calling ANYTHING unduly restrictive has to be having a laugh.

    If the DoD is not authorized to enter the market at all how does that help them? That's just bad luck.

    Again, the winners will be lawyers and nobody else...

    1. Anonymous Coward
      Anonymous Coward

      Re: Have big red

      The winner is Oracle delaying losing a lot of government business. The lawyers costs are a fraction of that business and the damage to the share price when the value of the lost business becomes public.

      And no, I don’t know the value but I suspect the short term cost is likely to be hundreds of millions in hosting/cloud in the medium term and if AWS/Azure win the business, I predict large scale migrations from a certain database vendor that probably has a licence or two for every DoD employee.

      1. hittitezombie

        Re: Have big red

        Not only Oracle cloud licencing, but also extremely lucrative database licences are at stake! Amazon wowing to replace Oracle in AWS must really have hurt them.

        1. Anonymous Coward
          Anonymous Coward

          Re: Have big red

          "extremely lucrative database licences"

          I suspect the difference between "licences the DoD really needs to use" and "licences that the DoD use because Oracle is a key supplier, our deals are great so lets use Oracle for everything" might be substantial. If the likes of MS/AWS are able to see some of these systems, the DoD may get solutions that a significantly more cost effective and no longer require ~2.5m Java and Oracle client licences. The solutions will still largely suck for end users, but that's not my point.

          1. Anonymous Coward
            Anonymous Coward

            Re: Have big red

            > The solutions will still largely suck for end users, but that's not my point.

            Pretty much every piece of software Oracle supplies - apart from the GUI with their database - is horrible for end users. Doubly so for their web based applications.

  2. jeff_w87

    If only Oracle would take all this money that they're throwing into this and other legal challenges and instead use it to make their products better and perhaps even cheaper - then maybe they might be competitive. Instead they throw legal tantrums when they don't get their way just a like a two year old throwing a fit when they don't get what they want.

  3. Kicker of Metaphorical Cats

    A story they know well

    "Big Red has argued the plan risks damaging innovation, would lock the DoD into a single cloud vendor for years, and is uncompetitive"

    Must have got that straight out of their own 'must defend against' claims.

  4. Marketing Hack Silver badge
    Go

    "criteria in the request for proposals, which it says are "unduly restrictive""

    I'm fine with Oracle having it's day in court over this matter, but the snarky side of me (Which, OK, is not a side, and is actually most of me.) envisions these DoD criteria including a clause stating "And we don't want to do business with any companies that have a reputation for being Silicon Valley's biggest "tool"-shed."

    1. Anonymous Coward
      Anonymous Coward

      Re: "criteria in the request for proposals, which it says are "unduly restrictive""

      > "...but the snarky side of me (Which, OK, is not a side, and is actually most of me..."

      Ah, but it is a side, either 'outside' or 'inside,' mostly. Personally I wear my snark on the outside. That keeps it abraded down to the proper thickness. I tried keeping it on the inside, but it just kept getting bigger and bigger...

    2. Down not across Silver badge

      Re: "criteria in the request for proposals, which it says are "unduly restrictive""

      Oracle is miffed that DoD might actually want cloudy features that its cloud offering doesn't have. Anyone who has worked with both OCI and AWS know that OCI is pretty bare bones compared to AWS.

      Also, I would've thought DoD is quite within their rights to determine what they need fulfilled in the contract. If Oracle can't fullfill those requirements, then tough.

  5. Anonymous Coward
    Anonymous Coward

    I admire Oracles honesty

    “The filing said injunctive relief should be granted, because of the public interest in the integrity of federal procurement processes, and that Oracle will suffer "irreparable harm of being deprived the opportunity to compete fairly for the contract" if it isn't.”

    I’m not sure injunctive relief is in the public interest but I wholeheartedly agree that Oracle missing out on DoD will cause them to suffer irreparable harm.

    Anyone want to buy a barely used cloud business? Biggest customer is about to leave, so more space opening up soon.

  6. a_yank_lurker Silver badge

    Larry wont get a new yacht

    "Oracle is also cut up about some of the criteria in the request for proposals, which it says are "unduly restrictive" and have been crafted to limit the number of companies that can compete." - Vendors will try to massage the specifications to give them a better position in large government contracts. This is the way the game is played and Larry's Minions got outplayed. The trick for AWS, Slurp, and whoever else is playing is have the specs broad enough it is not a sole-source spec but narrow enough to keep the vermin out. It is an art but if done right you have competitive bids from a limited number of qualified vendors and those not invited; 'Sorry Charley'.

    1. Me19713

      Re: Larry wont get a new yacht

      He was hoping to get an aircraft carrier to replace one of his yachts. Preferably with some nuclear weapons to use on Seattle.

      1. fajensen Silver badge

        Re: Larry wont get a new yacht

        He could buy a used one from Russia. Might need some minor repair and service work though.

        If he wants "new-ish, only ever sailed in anger inside the small, safe, mindspace of Gavin Williamson", the nukes doesn't have to work and it doesn't really need any planes to go with it, he can buy one from the UK.

    2. Anonymous Coward
      Anonymous Coward

      Re: Larry wont get a new yacht

      If the contract can allow competing bids form AWS, Microsoft and IBM then it would seem the fault of Oracle for their lack of product. That's a fairly diverse crowd to be able to bid that you'd think any major cloud player would be able to compete with. Is it the fact hat the Oracle cloud just isn't in the same league when they have to compete directly on features and price in a bid compared to just forcing people to use it with threats of license audit outcomes being negative?

  7. Speltier

    Interesting

    Oracle hired some pretty good lawyers, the arguments actually make sense. DoD saying no conflict of interest in a contract obviously intended as a cloud contract seems specious... I mean really, did DoD expect that AWS would not be in the running while Ubhi was scratching out pieces of the early contract terms? Who is kidding who here? Start an investigation, but only if someone notices.

    Finally, a cloud monoculture contract seems a little hazardous for security. It is a bit cheaper, and maybe that would help make up for POTUS flinging billions away on a useless physical wall when what is needed are walls to stop data pilferage about say, boomer locations.

    Oracle is a competitor that everyone loves to hate, but they seem to have found some flames at the bottom of the smoke column on this one.

    1. Anonymous Coward
      Anonymous Coward

      Re: Interesting

      "DoD saying no conflict of interest in a contract obviously intended as a cloud contract seems specious... I mean really, did DoD expect that AWS would not be in the running while Ubhi was scratching out pieces of the early contract terms?"

      But the DoD did identify conflicts of interest (the people involved raised the conflict) and they were separated from the decision process.

      Oracles counter-argument is that key decisions (using one provider) were already made at the point the people stood down from the process.

      On the larger point around cloud computing, the DoD currently has 50+ data centre operators for their systems and will pay almost US$17.4B in 2019. JEDI is estimated at being worth around US$10B for a 10-year contract to put that into perspective with overall DoD IT spend. Current DoD cloud spending was estimated at US1.15B/year in 2018, so the use of cloud is not new, and the consolidation of services into one provider (with multiple facilities) is expected to save significant amounts.

      AWS, Azure and Google have existing, large facilities dedicated to government services in the right locations for the DoD to use them for this contract. IBM and Oracle don't have suitable facilities at present - they expect the government to pay to build those facilities delaying implementation and increasing costs putting them at around a $100M-$200M cost disadvantage and 1-2 year disadvantage for bringing services (and savings) into service. IBM's cloud business will survive missing out on this contract, I suspect Oracles won't given it's chequered past.

      1. Dabbb Bronze badge

        Re: Interesting

        "IBM and Oracle don't have suitable facilities at present"

        They both have FedRAMP certified cloud facilities.

        1. theblackhand

          Re: Interesting

          "They both have FedRAMP certified cloud facilities."

          They do as do ~50 other providers, but Oracle and IBM lack the facilities in the locations DoD prefer and the existing connectivity. There bids specifically mentioned building new facilities in the required locations to the size required at a cost of ~$100m and resulting in a 2-year ramp up vs a 1-year ramp up for AWS/Azure who have existing facilities.

          Google also had facilities in the required locations, but withdrew - the reason given was employees not being happy with the contract, but I suspect they couldn't complete the required FedRAMP certification in a timely manner and the employee unhappiness was convenient. But then I'm cynical...

          1. Dabbb Bronze badge

            Re: Interesting

            I'm sorry, but what exactly the difference between building own datacenter vs renting space in Carpathia/QTS operated DC which already has everything you described ? Unless, of course, requirement of dedicated facilities was put into contract specifically to give advantage to one particular vendor.

            1. Anonymous Coward
              Anonymous Coward

              Re: Interesting

              "what exactly the difference between building own datacenter vs renting space in Carpathia/QTS operated DC which already has everything you describe"

              Absolutely nothing as long as the DC, connectivity and service migration can be delivered in a similar time frame.

              My comments are largely based on IBM's objections/reasons for losing the bidding process, but as Oracle doesn't have existing, large facilities in the same areas as AWS/Azure/Google FedRAMP facilities, it likely suffers the same issues.

              JEDI is supposed to deliver ~US$500M/yr savings by bring DoD cloud spending down from ~US$1.2B to ~$US700M per annum - spending the first two years building your cloud service to match existing marketplace offerings significantly reduces those savings, making the bids significantly less competitive.

              If this was purely around a single cloud strategy, I would be inclined to agree that it may be problematic, however splitting the JEDI contract between AWS/Azure would likely addresss this and isn't going to make the majority of the disgruntled parties (SAP, General Dynamics, Red Hat, VMware, IBM, Dell and HPE) any happier with what is in effect an exercise in attempting to provide some cost and security controls in an enormous infrastructure.

  8. -tim

    Commodity?

    If the cloud is just a commodity, they do have some points. The DOD wouldn't sign an exclusive 10 year contract for the supply of mess hall forks to one company, why should they do the same for compute resources if they are also a commodity? They also have rules about having multiple vendors in many other cases such as comms.

  9. John Smith 19 Gold badge
    Unhappy

    " If the cloud is just a commodity, they do have some points."

    Indeed.

    Let's not forget how many customers went down when Amazon had a fire in its main data centre and the customers hadn't bothered to code for fall over or migration to other sites.

    If the DoD needs are so great (and at 200 data centers they certainly look that way) it sounds very risky to put everything on a single supplier.

    I guarantee they will do the minimal amount of documentation (electronic or paper) to prevent migration to other competitors when the contract is tendered out again, because that's what all outsourcing vendors do, something governments never seem to realize.

    1. fajensen Silver badge
      Coat

      Re: " If the cloud is just a commodity, they do have some points."

      it sounds very risky to put everything on a single supplier.

      How many flavours of Risk would Sir like to have in one setting?

      Having many suppliers there is a contract, payments, an SLA, non-delivery and bankruptcy risk to handle for each supplier. The bureaucracy needed scales at about the number of contracts cubed.

      If those suppliers are also dependent on each other, we immediately have the "circle of monkeys"-problem: Each contractor will blame the next one for their failure until they are all aligned in a circle pointing their fingers in a clockwise direction. The con-tractors LOVE those complex multi-supplier contracts, so many intricate moving parts, there is always *something* blocking their work, needing more money!

      Single supplier, OTOH, is a single point of Blame!

    2. Anonymous Coward
      Anonymous Coward

      Re: " If the cloud is just a commodity, they do have some points."

      "If the DoD needs are so great (and at 200 data centers they certainly look that way) it sounds very risky to put everything on a single supplier."

      The end goal is probably around 100 data centres:

      - somewhere between 10-20 "commodity cloud" DC's. The difference between 10 (just AWS) or 20 (AWS+Azure) will likely come down to contracts and diversity.

      - at least one data centre per state for specific state requirements that aren't well served by a central DC

      - "special" DC's for DoD projects that may or may not be publicly known. I'm guess there will be a similar number of these to the number of state DC's due to known existing usage (i.e. certain equipment providers DC's for equipment support, DARPA projects etc)

      While this is a significant reduction in numbers, I'm not sure it is excessive given changes in DoD workloads and the boom in government cloud usage.

  10. Steve Davies 3 Silver badge
    FAIL

    In other words

    Please feel free to award the cloud contract to one company as long as that company is Oracle...

    Hey Larry... That ain't gonna work.

    1. Voyna i Mor Silver badge

      Re: In other words

      It might work. Oracle could be extremely difficult with existing contracts.

      You are about to access an Oracle database:

      []Continue with one month free trial of Oracle not-screw-you licensing*

      []Sign up now for new contract with new improved Oracle not-screw-you licensing**

      []Continue and hope nothing goes wrong***

      *Terms and conditions apply. We reserve the right to cancel the not-screw-you clause at any time.

      **We'll tell you how much it will cost when enough suckers agencies sign up.

      ***Wouldn't want to be the reason the lights go out in Washington, would you?

      1. Anonymous Coward
        Anonymous Coward

        Re: In other words

        The assumption is that the DoD isn't currently on the "Continue with Oracle completely-screw-you licensing*"

        What if all of those solutions are significantly cheaper than the status quo? And some of the contracts (Oracle cloud) are pay as you go or have a very minimal on-going cost for a minimum service level.

        Lawyers fighting this so aggressively suggests that Oracle know things will only get worse and announcing declining revenue from such a large customer is not good news.

  11. Psion1k
    Headmaster

    Definitely want a company that gets the details correct, at least.

    "Any DoD-alleged delay is a self-inflicted injury based on its refusal to ensure that DoD conducted this significant procurement in accordance with the law and in a manner above approach," Oracle said.

    If they can't even get an age-old saying right, they certainly are not "beyond reproach" in their attention to detail. :P

  12. LateAgain

    A single supplier for 10 years?

    Stop there.

    Someone is clearly missing the point.

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