Oregon Settles $6 Billion Lawsuit Over Oracle's Botched Healthcare Website (registerguard.com) 113
"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."
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"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 Medicar [politico.com]
Re: Hold on! Let me get the popcorn! (Score:1)
The free market was dead as soon as somebody had the bright idea to make medicine a subscription service.
Re: Hold on! Let me get the popcorn! (Score:1)
Who else would you blame it on? Picking a bad vendor and writing bad contracts is pretty much the essence of inefficient and corrupt government. The members of the Oregon government wasted this money because it wasn't their money so they didn't give a f*ck. And instead of going bankrupt over it, like most private businesses would have done after wasting that much money, since they are government, they can simply raise taxes and do it all over again and again.
So Oracle won (Score:4, Insightful)
> 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.
Re:So Oracle won (Score:5, Funny)
Then the state of Oregon says "YES!" to doing more business with these dead weight morons for more years to come?
Comment removed (Score:4, Interesting)
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But it's Oracle, so we're supposed to blame them.
Oregon is cool, isn't it?
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In sum, the committee says, "Cover Oregon failed for two main reasons: The state acted as their own system integrator (like HeathCare.gov), and the state tried to revamp its entire health care system, not just build an exchange."
Seems to me that the state had more to do with it than Oracle. I am sure you are great at making "simple credit card web app" but if you have ever done anything with healthcare in the US it is a nightmare. And yes I currently work building software for healthcare in the US at a state level.
http://www.usnews.com/opinion/articles/2016-06-08/cover-oregon-health-care-disaster-showcases-havoc-wrought-by-obamacare/ [usnews.com]
So they're paying millions of dollars for Oracle to claim they don't know how to do it? Maybe it is Oracle's fault after all... sales says "ok, we'll pad the budget, but it should be dead simple" and then implementation teams come in and realize they were actually undersold and then begin trying to suck all the blood out of a walking-dead project.
Oracle is at fault here for saying they knew the fuck what they were doing.
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An app that can probably run well on an average-spec web server with Apache and a free copy of sqlite.
So, in a about six years, .... (Score:5, Insightful)
... 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, .... (Score:5, Insightful)
. That was exactly my thought when I read this:
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.
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That was Oracle's plan. It's how Larry always negotiates damages: "Here's more of our crap so you're locked in forever, idiot!"
He knew he wasn't exactly dealing with the sharpest knives in the drawer and you'd agree if you've ever consulted with IT staff from any state agency. They generally wind up with candidates who can't find work elsewhere because they're not skilled or smart enough.
Suckers. (Score:3)
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.
Win/Win (Score:5, Insightful)
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: (Score:2, Interesting)
A few carefully structured donations to the right non-profits that coincidentally employ the sons and daughters of various state officials and it all goes away.
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There's a strong anti-Oracle sentiment because they almost always fuck up projects, outsource everything, lock in everywhere... then get nasty.
Re: Win/Win (Score:5, Insightful)
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.
Re: (Score:3)
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
Exactly. I love the $60M in "software" - that cost Oracle $0 in the short term and in the long term sets up a dependency that'll be the gift that keeps on giving.
Oregon got *screwed*, and apparently the folks in charge don't understand it.
Re:Win/Win (Score:4, Insightful)
The bill isn't going to come due for six years so anyone who can't get out a position of responsibility for dealing with the fallout before that hand grenade goes off isn't paying attention.
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Yea, the fact that okay'd that deal makes me think the failure was mostly on Oregon's side tbh... they clearly have no idea what success and failure even are.
Look carefully at the terms (Score:5, Interesting)
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 (Score:5, Insightful)
Re:Look carefully at the terms (Score:4, Informative)
Ok, you win. For the most effective single-line summary of a multi-paragraph article I've ever seen.
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That's because the state contract did not stipulate a working end product. The case was a sham.
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That would require Oracle to put limits on the level of service offered by the end-product, the change process, the requirements and design process. IOW, all the things Oracle can charge more money for, because it was done twice or thrice.
About half of ERP implementations fail, yet both vendor and (new) customer go through the same flawed process one more time; why? Because the vendor wants to screw the customer; as its first, second and third priority. Because, despite the endless horror stories about open-ended contracts, the customer still says "fix this" without implementing it own change review/control/analysis processes. Because the customer uses a management psychopath instead of its own IT department for project management. Because the customer is too busy saying "gimme, gimme" instead marching the project towards completion.
Absolutely true. But any customer with an ounce of experience goes into the process *knowing* that the vendor (especially ORACLE) intends to screw them. A savvy customer, realizing they really do need to do business with some collection of vendors to meet their objectives, puts checks and balances in place, and has an exit plan, to prevent something like this from happening. Oregon was not savvy.
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So what you're saying is that Oracle didn't get out of a typical government contract... It was a contract involving government, insurance, medicine, and a very political situation highly likely to change multiple times.
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So what you're saying is that Oracle didn't get out of a typical government contract... It was a contract involving government, insurance, medicine, and a very political situation highly likely to change multiple times.
"mistake" may have been too strong of a word. Indications are, Oracle made significant money on the deal. The project was not successful, but that was not Oracle's objective.
Comment removed (Score:4, Insightful)
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The government people overseeing the project got to keep 100% of their paychecks.
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The government people overseeing the project got to keep 100% of their paychecks.
Yes, but several of the high-level ones lost 100% of their jobs following the debacle, you anti-government troll.
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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%.
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It's a trap (Score:3)
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.
The beauty of the deal. (Score:2)
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 ... "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.
No, the beauty of the deal is that if you do choose to take full advantage of the free software and modernize you systems, then you'll be on the hook to Oracle for even more money for licensing and support *after* the six years of freebies runs out -- unless you then want to scrap your Oracle systems. Points: Oracle
Why Oracle? (Score:3)
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.
Re:Why Oracle? (Score:5, Funny)
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...
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Re: (Score:2)
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It is the fastest in benchmarks. That's about it.
There aren't that many people in Oregon. My Apple ][ could churn through that many transactions in a year.
The database is the easy bit for anyone with a grasp of normal forms and the correct mild case of aspergers. Web site logistics is a bit trickier, but get someone who deals with online sales to do that, like Amazon or Alibaba.
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Oracle's DB does large clusters like no other.
_Everything_ else Oracle makes/owns is garbage.
If Oregon uses Oracle for any database that doesn't need that power they are morons.
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Exactly.
Don't forget MySQL, the biggest POS in use today.
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I'm not a database guy either, but if I had to take a guess, I'd say "scale". It's pretty simple to set up small, open-source databases for small websites, or medium databases that only have to scale up to a large corporation using powerful hardware. I'd imagine it's somewhat more difficult to scale operations up to the point an entire state, with potentially millions of total and thousands of concurrent visitors.
We're tech-savvy people, so we know what Oracle is like. But Oracle pays a lot of salespeopl
Can't be open source (Score:5, Insightful)
(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.)
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Is there really something that Oracle does that an open-source database can't do?
Oracle has grown into an enormous software services company; their database system is now only part of that. Support is the primary reason enterprises use Oracle DBMS, not a particular feature.
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Is there really something that Oracle does that an open-source database can't do?
Yes. It gets integrated. Remember with these kinds of projects you're almost NEVER paying for the underlying database. That can be replaced with anything off the shelf. These projects are a complicated shitstorm of business integration. Companies like Oracle and IBM thrive on the fact that every single install is bespoke and that they are being essentially paid to provide consultants by the hour each time.
We crap on Oracle for this, but the reality is that most of the companies that provide this service are
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From what I've seen happen many times, a company does not need to use Oracle's products. Those multi-tenanted, cluster databases with editions, ...etc. Nice fun tech. But will the companies use it all? Nope. Only a fraction, and it could be run on other alternatives far cheaper.
What I have seen happen is the Oracle sales person makes the person taking the decision to feel important and powerful. "Look how much money I am spending on this project. I must be a big player." The sales person takes them out to l
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Yes, Oracle has a planner that doesn't resort to guessing when presented with a query with more than 12 joins. Its plan cache is also shared across backends.
Money saved (Score:2)
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A-fucking-men. The problem is that the state is already locked into Oracle with tons of shitty systems to maintain. It's probably the best deal they can make without making a multi-billion dollar commitment to get the fuck off of Oracle. But even then they'd just choose another shitty vendor. 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.
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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.
Not worth automating at all, apparently (Score:3)
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?
Re:Not worth automating at all, apparently (Score:4, Informative)
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?
I keep having this argument at my office. The big bosses want to invest in a programming project that will supposedly eliminate the need for human intervention in a publication process. I keep pointing out that humans still have to look at the material before publication (witness Facebook's recent experiments with algorithms as news editors). But they are so dead-set against hiring a person with benefits that they'd rather spend twice as much buying hardware and writing software that only does half the job.
If they'd hired a person, the backlog would be cleared and the process would be working smoothly. Instead, we're on the nth redesign of the GUI that is nearly unusable because the engineers are in charge of designing it.
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I'm glad I'm not the only one: "let's spend $800k to process a special case that occurs approximately once every eight months, is easily recognizable and flaggable, and can be done by hand by a clerk in 20 minutes..."
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Defective by design (Score:3)
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.
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I see what you're trying to say, being funny n all, but the summary even already covered this by mentioning the new employees that needed hired to process the applicants that applied by paper instead.
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True but how many people did they sign up? Did that justify hiring 400 people, all of whom have to get a salary and benefits?
cartoon state (Score:2)
Oracle won't realize they lost the lawsuit until Oregon refuses to accept all that free Oracle software.
Nicely played, Oregon.
John Oliver on Oregon [youtube.com]
This is not one of the ones Oliver knocked out of the park. Nor does it actually end "nicely played, Oregon".
SERIOUSLY WTF (Score:2)
Oracle writes software that doesn't work ...
Oregon sues Oracle over non-working software
Lawsuit is settled by Oracle giving Oregon more software for free
BUT THE WHOLE POINT IS ORACLE'S SOFTWARE DIDN'T FUCKING WORK IN THE FIRST PLACE
Why the hell would Oregon settle for MORE of the same bullshit that started the lawsuit in the first place!?
Sick of this arguement (Score:4, Interesting)
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.
Get your claws really sunk in (Score:2)
Letting Larry really get his claws into the state, after one of the most egregious fuck ups Oracle could possibly manage? What the frell is wrong with these people? What the hell happened here, and why did Oregon- like a complete sucker- agree to let themselves be completely swindled for a second time, like a total n00b sucker? The poor people of Oregon, you failed to get software built for yourself in a inglorious fashion, now you are again being taken.
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Can fugu chefs use that defense?
Unreal (Score:1)
Me and a few programmer buddies of mine could have built this thing for a couple of million or so, and it would have WORKED.
Never trust Oracle (Score:1)
Is this "Free software" or a Trojan horse?
Sigh. (Score:3)
"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!"
And then Oregonians just turn around (Score:2)
And then Oregonians just turn around and let the government run even more of their lives. Because we all know, piping money through the government is the pinnacle of efficiency.
morons (Score:2)
An ultimate win for Oracle (Score:2)
At the end of six years of free period, everything in Oregon government establishment, including simple websites will be using Oracle DB & systems, resulting in huge ongoing revenue for Oracle.
Re: (Score:1)
Sorry to tell you buddy, but what you're promoting is anarcho-capitalism, and that is probably worse than anything we have going on right now.
Trying to say that we'd be better off if we just completely de-funded modern infrastructure would be like saying committing suicide would be appropriate to prescribe oneself for a bad migraine.
60M == 100's of millions. Government overhead? (Score:2)
Ok so "software licensing agreements and technical support with an estimated upfront worth of $60 million..." but somehow "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"?
The only thing I can think of that paying those 60 million somehow costs the state of Oregon 100's of millions. That's one hell of of an overhead cost! No wonder they couldn't make the website work, for every $1 in insurance premium coll
Too much, then too little? (Score:3)
What's the deal?
If Oracle still is in use, Oracle WINs (Score:1)
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
Oracle wins
So this is how they get their business...they F-up and still win. amazing.
My last job was outsourced for pennies on the dollar, guess Oracle will do the same....profit! Way To Go Oracle, you suck!
Anyone who has had to update, maintain or change a mainframe based system where Oracle is involved understands all too well....pathetic.