Oracle has become the sixth major supplier to announce a memorandum of understanding (MoU) with the government, agreeing to a ‘single-client’ approach to IT procurement.
Almost immediately after, Microsoft announced its MoU with the Cabinet Office "in support of the initiative to centralise government procurement".
The contract reviews are the result of negotiations that Francis Maude, minister for the Cabinet Office, initiated in July. Other suppliers involved in the negotiations are expected to make similar announcements in the coming weeks.
Government departments that use Oracle software and systems include the Home Office, which has a shared services programme based on Oracle eBusiness enterprise resource planning software and the Rural Payments Agency, which has been under fire for its IT, which includes heavily customised Oracle-based systems. The Ministry of Defence (MoD) also recently scrapped a £141 million IT and consultancy framework deal, which involved the tender for support relating to Oracle products.
Oracle said that under the MoU, in support of the government’s “efficiency agenda”, it will continue to deliver on existing projects, and support the government in “new initiatives to restructure its business processes”.
Meanwhile Microsoft's general manager for the public sector, Dr Nicola Hodson, said that the new MoU "builds on PSA09, the software purchasing model Microsoft recently formed with the UK public sector", which she said has driven better value for money and more flexible enteprise software licensing.
"We look forward to working with Francis Maude and all our government customers in meeting their goals of reducing the overall cost of government IT whilst working with them on developing innovative solutions to drive further efficiencies and improve productivity," Hodson added.
Analyst house TechMarketView recently predicted that the government's IT suppliers, including Microsoft and Oracle, are set to lose substantial revenue this year due to budget cuts. Microsoft's public sector contracts include a desktop virtualisation deal with the Department for Work and Pensions (DWP).
This latest MoUs follow yesterday’s release of a government-commissioned review of Whitehall’s spending carried out by Topshop boss Sir Philip Green. His report concluded that all government IT contracts worth over £100 million required an immediate audit.