Mark Hurd, co-CEO Oracle, on Brexit, Trump and digital government

At this week's Oracle Cloud Summit Analyst Day, I had the opportunity to ask Mark Hurd, co-CEO Oracle about the company's position as it relates to the current geo-political situation in the US, UK and Australia. I was thinking about the marked difference in tone around digital government over the last year and the likely impact on Oracle government spend. Here was my question:

Earlier in the year, we saw Brexit. We now have Donald Trump just about to go into the White House, and in Australia they seem to have taken a cue from both nations and have created a situation where digital government is becoming very, very difficult. What is your message, as Oracle, to those governments in view of what you're seeing on the ground in terms of contracts and where people are going?

This is not an easy question for any technology CEO. The fact remains that in all three territories, there has been a general retreat from the progressive ideas of digital government we saw emerging in recent years. Trump for example having gone so far as to say that he distrusts technology. Even so, Hurd gave us an interesting insight into how he sees the picture in the context of Oracle as one of the UK and US's most important technology providers.

I have lightly edited his answer for the sake of brevity

This country has a trillion dollar budget deficit. You know, DoD, Department of Defense and Law spends $45 billion on IT in one form or another, spends all of that money, relatively speaking, in silence. If you went into the Defense Department, every one of the branches of service has their own IT. Navy. They all have their own data centers, and in many cases, they have systems that are located by base, there's no sharing.

There's not anything ... Same thing's true when you replicate systems between NSA and CIA, all the things that we're not supposed to talk about much for those of us who have security clearance. There's a ton of inefficiency in that process, so that's not new news. That's not news that has anything to do with Brexit, that has anything to do with Donald Trump. It's just a fact of life, that the government, particularly the United States government ... UK is not very much different. A lot of inefficiency.

You have to think to continuously, for us to bring that together. I think, just to give you an example, in the Navy, if we consolidated the Oracle database in the Navy, we can probably get about half an aircraft carrier. That's the sort of TCO lever that you could get. We continue that work.

The hardest thing in government is to find somebody who's in charge. Frankly, the way the model is built is that, for example, Leon Panetta, who ran the Department of Defense, is now on our board. I talked to Leon for years about this for years, asking why the hell can't we get anything done?

The core problem of government really has less to do with technology and more to do with electoral leadership and the fact that secretaries generally change every couple years, they last about two-two and a half years. As a result, by the time they figure out what's going on, they're out. More than anything it's and administration problem and one that we're going to continue to beat our head against the wall because the opportunities are just huge in terms of efficiency.

My take

Hurd's answer is interesting because, for the first time, we are hearing an insight into the way government spending works from the supply side. Oracle is important in this context as one of the largest suppliers to both the UK and US governments so if they are experiencing a degree of frustration then you can be sure that is the tip of the iceberg. For ourselves, we see plenty of frustration among those who are endeavoring to bring efficiencies and those who are trying to meet those needs.

Now consider this: Safra Catz, Hurd's co-CEO at Oracle is on the Trump Transition Team. We cannot know and would not ask what input she has had, but we do know that Trump has consistently talked about cost cutting in every area of government spend. The fact Hurd is signaling the lack of continuity in leadership as a problem that makes rationalization very difficult should provide low hanging fruit which the incoming Trump presidency can pick as a fast track way of delivering success.

If Trump's government is able to bring stability to government IT spend then it will serve as a powerful signal to other governments, not least the UK which, until recently, I would argue has been leading the way in terms of digital transformation and to Australia, which again, until recently, had been drawing cues from both the US and UK, but which more recently has seemed intent on self immolating.

Endnote: I will have more comments from Hurd's Q&A in follow up stories from the event