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Oregon Settles $6 Billion Lawsuit Over Oracle's Botched Healthcare Website (registerguard.com)
"While the crippled website eventually worked, Oregon failed to enroll a single person online [and] had to resort to hiring 400 people to process paper applications." An anonymous Slashdot reader quotes the AP:
The state paid Oracle $240 million to create its Cover Oregon website but ultimately abandoned the site and joined the federal exchange to comply with the Affordable Care Act... The state initially asked for more than $6 billion in punitive damages when it filed the lawsuit in 2014 against the Redwood City company, but Oregon ultimately accepted a package that included $35 million in cash payments and software licensing agreements and technical support with an estimated upfront worth of $60 million...
Six years of unlimited Oracle software and technical support included in the deal will save the state hundreds of millions of dollars in years to come and ends a bitter legal battle that has damaged Oregon's "collective psyche," Attorney General Ellen Rosenblum said in a statement. "The beauty of the deal is that if we choose to take full advantage of the free (software), we are uniquely situated to modernize our statewide IT systems over the next six years -- something we could not otherwise afford to do," she said.
"Oracle has insisted the website worked but former Gov. John Kitzhaber chose not to use it for political reasons."
Six years of unlimited Oracle software and technical support included in the deal will save the state hundreds of millions of dollars in years to come and ends a bitter legal battle that has damaged Oregon's "collective psyche," Attorney General Ellen Rosenblum said in a statement. "The beauty of the deal is that if we choose to take full advantage of the free (software), we are uniquely situated to modernize our statewide IT systems over the next six years -- something we could not otherwise afford to do," she said.
"Oracle has insisted the website worked but former Gov. John Kitzhaber chose not to use it for political reasons."
> Oregon ultimately accepted a package that included $35 million in cash payments and software licensing agreements and technical support with an estimated upfront worth of $60 million.
Software licensing which will probably cost them more than $95 in the next few year(s) because they are not using the software according to the license.
... they will generate a very big cash-flow for Oracle, since they are now uniquely situated to completely vendor-lock-in their statewide IT systems?
Just wait until they do all those resource intensive upgrades and locked all their systems to Oracle, and then find out what the licensing/maintenance fees are from the 7th year onward.
"National Security is the chief cause of national insecurity." - Celine's First Law
Oracle avoids a $6 Billion lawsuit
Oracle nets $200 million after a small reimbursement
Oracle potentially gives away software that creates a lifetime dependency on their products going forward
Oracle hasn't actually given away any software yet
Win/Win
for Oracle
When the foot seeks the place of the head, the line is crossed. Know your place. Keep your place. Be a shoe.
Caveat: I'm no friend of Oracle, and as much as both sides in this were odious, I was actually voting for the state.
I live here, and have connections in government IT. The inside word is that this was largely botched on the government side, with too high expectations, too many changes, and huge feature creep. I would argue that Oracle's mistake was not getting out when they plainly saw that this was a dysfunctional working relationship.
But look what Oracle offered -- a paltry (by their standards) sum, amounting to a roughly 15% discount on the original price tag, plus licenses that lock Oregon into more dependence on Oracle, which are guaranteed to make money for Oracle down the road.
One can paint this as a victory for Oregon with inflammatory headlines, but it looks to me like Oracle won in the end. (And since this is Oracle, "the end" is exactly what you imagine it to be.)
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
Comment removed based on user account deletion
The beauty of the deal is that if we choose to take full advantage of the free (software), we are uniquely situated to modernize our statewide IT systems over the next six years
NO! Modernizing your IT systems does not involve purchasing the most expensive Legacy SQL Server software on the block.
Also, what happens when the 6 Years run out? The state will probably be paying Oracle more than $100 Million a year in licensing fees thanks to their "Free" deal, and now all their IT systems will be tied to Oracle's expensive legacy SQL products, instead of more affordable ones such as PostgreSQL, Hypertable/Cassandra or even Microsoft SQL Server.
So, maybe somebody here can answer this...
Why would you use Oracle for anything? Is there really something that Oracle does that an open-source database can't do? I mean, they're clearly a horrific company to do business with, it would seem that if there's any other solution that would work it would be an obvious choice not to use Oracle.
I'm not a database guy, it's a real question.
"Private sector insurance and healthcare"
Not quite exactly unlike that. Large scale healthcare in the US is a kludge (that's the nice word) of dozens of different, overlapping, often contradicting Federal, State, International (i.e., the World Health Organization), public (at other levels), private, public-private, for profit, not for profit, 501C3 corps (bog help me if I can figure them out organizations.
The crippled horse rolled out of the 'free market' barn in 1964 when Lyndon Johnson signed the Medicare enabling act (actually first suggested by Harry Truman).
Bog knows what you'd call the current system other than an enormous clusterfuck.
(sorry for the parenthesis, In Seattle, too much coffee.)
Faster! Faster! Faster would be better!
Let's assume those 400 people hired to handle paper were an inferior result, but they couldn't have been too horrible or the state would have been browbeaten into hiring more. So I'm going to spitball that 800 staff at an average of $70K per year each (with all bennies and burdens, they'd probably gross $50K), would cost $56 million a year...or $240 million over 4.2 years, not an indecent lifespan for a major web app these days.
So frankly, what's the point in automating at all, if it's going to be as expensive as a decent manual solution that would have been up and running in 3 months?
Because using open source means you yourself are accountable. If Oregon had done this project with an open source database and it had failed, the government would be the one bearing the blame. Hiring a big-name company to do it means if something goes wrong, the government's butts are covered. They hired a well-known company to do it for them. If the company couldn't do it, then obviously it must be the company's fault!
(I use "the government" here only because it's specific to this case and lets me avoid confusing pronouns. The same thing happens when companies choose Oracle or Microsoft or IBM or any other big name without really doing a serious analysis.)
But what if the real problem is that nobody really WANTED to sign up? Yeah, yeah, that's probably not the case but it is amusing.
Europeans money is worth more
They get more vacation
They get free college
They have free healthcare
They live longer
They have lower infant mortality
They have more holidays
We have been fucked and we argue that the government is screwed up. We screwed up when we let corporations destroy our government.
"They fucked up majorly to the point where we sued them, but then offered us some more of the software they fucked up for free, and we can tie ourselves into them more, so we thought that's a great deal and a good use of taxpayer's money!"
Most contract based negotiations involve determining the performance. I hate Oracle as much as anyone in IT, but playing devils advocate and knowing how IT projects in various governments often present a moving target there's a chance that the government took this offer because the courts may actually find it more in Oracle's favour.
Remember Oracle delivered something. The criteria is not a black and white it works = 100%, it doesn't = 0%.
Which do you want - IBM, Oracle, or Microsoft? Those are the Vanilla, Chocolate, and Strawberry of flavors you get to choose from when you're a client as big as a state.
A client that big can afford to hire developers and roll their own solution from Open Source ingredients. But they usually don't, because you can't blame failure of a project like that on IBM, Oracle, or Microsoft.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
What's the deal?