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."

Comments

So, in a about six years, ....

[aix tom]

... 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?

Re:So, in a about six years, ....

[whoever57]

.. 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?

. That was exactly my thought when I read this:

."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 gets to be baked into their IT systems, so deeply that when Oracle asks for a price increase, Oregon's answer will be "how high do you want it?" [ and yes, the accidental double meaning that could be inferred from my imagined quote is probably very appropriate and accurate ]

This is a deal that only an incompetent or corrupt person would think is a good deal for Oregon.

Win/Win

[alphatel]

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

Re: Win/Win

[BlackSabbath]

True.
I'm currently working at a big bank that has poured hundreds of millions into Oracle for a flagship project that has way under delivered and is a couple of years overdue. The vast majority of their techs couldn't program their way out of a wet paper bag. I thank my lucky stars I'm not involved in that clusterfuck.
While I'm sure there's culpability in the Oregonian government for this, to hold Oracle blameless would be wrong.
There was once a time when Oracle was the right answer to the question "which database". Now, I'm pretty sure they're not the answer for anything.

Look carefully at the terms

[roc97007]

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.)

Re:Look carefully at the terms

[phantomfive]

Oracle won by saying, "Yes, you win, you can pay me."

Re:So Oracle won

[LifesABeach]

Let me see if I understand this correctly. The state of Oregon accepts a 95 million dollar settlement while paying 240 million dollars in damages because Oracle's dumb ass stupid H1B village idiots can't do a simple credit card web app?

Then the state of Oregon says "YES!" to doing more business with these dead weight morons for more years to come?

Re:Why Oracle?

[Joce640k]

Is there really something that Oracle does that an open-source database can't do?

Yes.

Wear suits, take CEOs and senators out to dinner together, pass a few envelopes under the table...

Can't be open source

[Solandri]

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.)