Oracle attacks US government digital efforts as “false narratives”

SUMMARY:

Enterprise technology giant Oracle has responded to an executive order from President Trump that opens it up to charges of being on the wrong side of change

Oracle believes that the a significant chunk of the US Federal Government’s digital modernization efforts are “false narratives.”

Specifically, it doesn’t believe that the government should look to emulate the practices of Silicon Valley. It doesn’t believe that the government acquiring its own in-house development knowledge is beneficial to the modernisation of gov systems. And it doesn’t believe that the use of open source software is safe, valuable or cost-effective.

The rather jaw-dropping response from Oracle to an executive order from President Donal Trump that opens up the enterprise technology vendor to charges of being on the wrong side of change in the context of global government modernisation. In fact, it comes across rather strongly as a deliberate attempt to maintain the status-quo.

It’s also worth noting that co-CEO of Oracle, Safra Catz, was one of the technology leaders to take a seat on the executive committee of President Donal Trump’s Transition Team, shortly after his inauguration.

A number of other vendor responses to President Trump’s call for feedback on how best to modernize government IT – including the likes of Microsoft, SAP, Google and Amazon – seem to welcome the Administration’s attempts to move away from monolithic systems based on waterfall development practices, towards modern systems that use agile practices, user-centred design, modern Internet technologies and open source software.

For those unaware, a wave of change has been taking place within the US Federal Government in recent years, following a number of disastrous projects that called into question that practices that agencies have been deploying over the years. The healthcare.gov debacle is the most obvious example of a government project that used traditional practices and went horribly wrong.

Since then the government has set up two digital practices – USDS and 18F – to help in-source some technology expertise, help and advise agencies on how to deploy modern, agile services, and work with the administration on setting standards and driving change. Although the practices and strategy was set up under the Obama government, Trump’s administration has expressed full support for the efforts.

However, judging from Oracle’s response to the strategy, it seems that it would rather things went back to the way they were. And that may not be entirely surprising, given that the largest vendors in the community – including Oracle – have made significant sums from having the resources to understand how complicated government procurement systems worked and keeping the market closed to a select few.

Opening that market up to smaller vendors, selling to a buyer that understands technology, and competing against open source technologies could create a lot of problems for a vendor like Oracle.

But the response to the executive order really needs to be read to be believed. Anyone that follows modern technology buyers and projects will genuinely guffaw at a lot of the comments expressed as fact – but are mostly misleading and/or laughable.

False narrative #1

False Narrative: Government should attempt to emulate the fast-paced innovation of Silicon Valley. Silicon Valley is comprised of IT vendors most of which fail. The USG is not a technology vendor nor is it a start-up. Under no circumstance should the USG attempt to become a technology vendor. The USG can never develop, support or secure products economically or at scale.

Government developed products are not subject to the extensive testing in the commercial market. Instead, the Government should attempt to emulate the best-practices of large private-sector Fortune 50 customers, which have competed, evaluated, procured and secured commercial technology successfully.

Government is unique. That is true. However, Oracle’s insinuation that the digital practices taking place in the US are ignoring that fact is entirely unfair. There is some basis in Oracle’s argument that the US Government shouldn’t be developing everything in house, but that isn’t what is currently happening in federal agencies.

Equally, the implication that the government shouldn’t try to emulate the modern practices of technology companies – or that Fortune 50 customers aren’t doing exactly that – is just untrue. We have a bank of customer stories on diginomica about global enterprises that are insourcing digital capabilities, adopting agile practices and are attempting to build Silicon Valley start-up-style departments to help keep pace with fast growing Internet-native giants. It’s just a fact that the old way of doing things just doesn’t cut it anymore.

It’s so blindingly obvious that the status-quo just wasn’t working for government. Project failure after project failure – where the government relied on private sector and Silicon Valley expertise solely – is evidence enough that the government should be looking to adopt the new best practices being adopted by modern digital developers and buyers.

I’ve said it before, but if governments ignore what’s happening in places like Silicon Valley, there’s every chance that the private sector will develop alternative services that are more competitive than public delivered services. There’s no reason that what happened to Blockbuster with Netflix won’t happen to government.

False narrative #2

False Narrative: In-house government IT development know-how is critical for IT modernization. In-house government procurement and program management expertise is central to successful modernization efforts. Significant IT development expertise is not. Substantial custom software development efforts were the norm at large commercial enterprises, until it became obvious that the cost and complexity of developing technology was prohibitive, with the end-products inherently insecure and too costly to maintain long-term.

The most important skill set of CIO’s today is to critically compete and evaluate commercial alternatives to capture the benefits of innovation conducted at scale, and then to manage the implementation of those technologies efficiently. Then, as evidenced by both OPM and Equifax, there needs to be a singular focus on updating, patching, and securing these systems over time.

Again, there is truth in that CIOs need a skill set that enables them to effectively evaluate commercial options in the market. However, to suggest that in-house development expertise is not beneficial is just not true. Again, it’s the lack of effective in-house capability that often resulted in huge government technology cock-ups. Not understanding how systems worked and how modern technology could be deployed often resulted in government buyers ‘buying IBM because no-one ever got fired for buying IBM’.

The procurement of digital systems requires a broad set of skills and capability that government should be looking to build up in their entirety. If you look at what the UK is trying to do, by introducing academies to skill up existing civil servants in digital and agile practices, it’s obvious the benefits that can be gleaned from not assuming that your private sector partner can do it all for you.

This also does not mean that government agencies will need to do it all themselves, but knowledge is power, and that is never more true when buying and deploying technology.

Fales narrative #3

False Narrative: The mandate to use open source technology is required because technology developed at taxpayer expense must be available to the taxpayer. Here there is an inexplicable conflation between “open data,” which has a long legacy in the USG and stems from decades old principles that the USG should not hold copyrights, and “open source” technology preferences, which have been long debated and rejected. There is no such principle that technology developed or procured by the USG should be available free for all citizens, in fact that would present a significant dis-incentive to conducting business with the USG.”

This one is likely to get the biggest laugh of all. Oracle goes on to say in its response that “the
fact is that the use of open source software has been declining rapidly in the private
sector”. It then adds that there “ is no math that can justify open source from a cost perspective as the cost of support plus the opportunity cost of forgoing features, functions, automation and security overwhelm any presumed cost savings.

It also adds that “this practice puts the government – most likely in violation of the law – in direct competition with U.S. technology companies, who are now forced to compete against the unlimited resources of the U.S. taxpayer”. And then points to the Equifax breach as an example of how an exploit stemmed from an open source Apache Struts framework.

Let’s deal with this last point first. As Mike Masnick over at Techdirt notes, the Equifax breach was a result of a widely discussed bug that should have been patched, if Equifax’s administrators had been competent enough. Equally, the bug was found and patched because of the open source community.

Secondly, to suggest that the US government is violating the law by using open source technology is incredibly bold. It sort of defies logic that by being open and contributing to a community, as opposed to spending money on buying closed technology, is illegal. But again, Masnick deals with this point succinctly in his blog, by highlighting that the works of government shouldn’t be subject to copyright.

But thirdly, and most importantly, it’s just simply not true that the use of open source is declining in the private sector. More and more we are in discussions with buyers that are looking to open source to complement or drive their technology deployments, because of the benefits it can bring. You’ve just got to look at the cloud native movement to get an idea about how this is shaping up in the private sector.

Equally, many of the internet giants – such as Netflix – are big supports of open source software. Survey after survey shows that more and more private companies are using open source technologies. It’s interesting that Oracle seems more threatened by open source than it does by existing private sector market competition…

Code for America’s response

Oracle’s response has since also been picked up by Jennifer Pahlka, who is a big name in government technology circles and is a co-founder of the US Digital Service. Pahlka is also the founder and director of Code for America, an organisation that has been applauded for its work in using open source technologies to bridge the gap between the private and public sector.

In a blog entitle – ‘Which side are you on vendors?’ – Pahlka highlights that most of the vendors in the private sector are willing to embrace the changes being made by government buying practices. However, on Oracle’s response, she doesn’t mince her words. She says:

I am surprised by the bald protectionism and lack of sophistication in Oracle’s stance here, but I shouldn’t be. It’s not just that the company is famous for debacles like the $240M Cover Oregon site that never produced a functional exchange. It’s also that I’ve spent the last seven years talking with cities, counties, states, and federal agencies about their use of technology, and I have yet to meet a happy Oracle customer.

I have met Oracle customers who have explained to me with complete conviction that there simply are no alternatives to Oracle. At one point a few years ago, there were so many state and local governments who simply could not afford to upgrade to the newest version of Oracle software that the company was forced to continue supporting an older version they had slated for retirement.

On referencing False Narrative #2, Pahlka adds:

Oracle’s success depends not on having a great product their customers love, but on their government clients having little to no technology background, and little ammunition against their aggressive negotiation.

If Oracle is coming out strong against in-house technology talent, it’s simply because so many more talented technologists with higher expectations for the technology they build or buy are coming into government, many of them through Code for America’s fellowship program or talent initiative, and ending in up places like city halls, 18F and USDS. They’re having a positive impact there on behalf of taxpayers and everyone who needs to interact with government, and Oracle doesn’t like it.

Ouch.

My take

There are many other points made in Oracle’s response that are worth reading in full – particularly its comments around how in-house development and customisation increase costs for the US government. Hasn’t Oracle made much of its revenues over the years by relying on its customers to customise and incur large maintenance bills?

However, while some of Oracle’s points are valid, it’s taking a clear and strong stand against most of the other companies that have submitted responses to the executive order. And as a result, is at risk of placing itself on the wrong side of history. It comes across as a clear attempt to maintain the status quo, which has historically worked in Oracle’s favour, rather than a thoughtful attempt to help the government make necessary change. And I think in the long run, that will do more damage to its selling to government than anything else.

Image credit - White house image a free stock image

Disclosure - Oracle is a diginomica premier partner at time of writing.

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