Contract clash adds to Oracle woes

["Hamaker, Chuck" <cahamake@email.uncc.edu>]

Contract clash adds to Oracle woes
By Reuters
May 6, 2002, 5:40 AM PT
http://news.com.com/2100-1001-899390.html

At a time when Oracle was already grappling with slumping sales, a key
executive departure and a stock price hovering near three-year lows, the
No. 2 software maker has now become embroiled in a controversy over a deal
with the state of California.  snip For months, there have been lingering
questions over the deal, since it was not subject to competitive bidding
and few state departments had expressed a need for the software.

The uproar over the transaction gained momentum in mid-April, when the
state's auditor said the contract, which has an initial term of six years,
would end up costing taxpayers $41 million more than if the state had used
another purchasing method.

snip

It's the deal, not the software

The latest software controversy is not about the quality of the software,
but about the state's ability to make savvy technology purchases,
Greenbaum said.

The state was negotiating with Oracle in the final days of the company's
fiscal year, when sales representatives are eager to book deals and,
therefore, more likely to OK discounts.

"That's the time of the year when you can get the best deal out of a
software vendor," said Greenbaum, who added that the Oracle contract
appeared to be a "pretty good deal" for the state based on the very
limited information available.

"If other government vendors are smart, they're not going to make the same
mistake that California did, and they're going to get the same price that
California did," he said.

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