Today came confirmation that Oracle has finally agreed a new deal with the Cabinet Office that is slated to deliver ‘in excess of £75m in savings’ across government by 2015. Under the deal, Government will now be treated as a single customer with all departments able to buy software at the same ‘bulk purchase’ rate. Crucially, spare licenses will also be able to be shared or re-used between departments, something that can’t happen at the moment.
The move follows the Cabinet Office's announcement earlier this month of fresh savings from HMRC’s Aspire contract with Capgemini. That new deal is expected to save HMRC more than £200m by 2017. The renegotiated contract also gives HMRC more freedom to run open competitions for its IT needs (which the Cabinet Office hopes will create more opportunities for innovative SMEs) and further enhances transparency in pricing. All in all, not great news for Capgemini, whose UK public sector business is still heavily weighted towards Aspire.
It’s clear that there’ll be no let up in pressure to deliver savings from IT and that large SIs will continue to bear the brunt of the cuts. According to Cabinet Office Minister Francis Maude, last year’s contract renegotiations with suppliers resulted in £800m in savings and a further £140m will be delivered this year. Overall, the programme of reforms to eradicate waste across Whitehall achieved savings of £3.75bn in 2010/11 and is on target to deliver a further £5bn of savings in 2011/12, Maude said.