Pentagon awards Oracle nearly $7 billion deal in latest software consolidation push

The Pentagon announced on Thursday ​a nearly $7 billion, up-to-10-year ​agreement with Oracle to consolidate the ​department's on-premises software licenses into a single contract, the latest move by the Pentagon's technology chief to cut ‌costs by ⁠eliminating ⁠fragmented purchasing.

The Enterprise Software Agreement, negotiated by the Department of the Navy, is between the Pentagon and Oracle for its on-premises compute usage.

The agreement spans five years, with a further five-year option, and covers ​the entire Pentagon, along with ⁠the U.S. ‌Coast Guard and the intelligence community.


"By ​fundamentally ​improving how we procure on-premises Oracle ⁠capabilities, we are driving at least $441 million ​in taxpayer savings while rapidly and effectively ​serving our warfighters," Pentagon Chief Information Officer Kirsten Davies said.

The Oracle agreement builds on a similar effort Davies' office struck with Microsoft in May. That five-year, $9.69 billion deal consolidated ‌Microsoft and other enterprise software licenses scattered across the military services, the intelligence community and the Coast ⁠Guard into a single contract.

The two deals mark a broader push under Davies to rein in years ​of duplicative software spending across the military by replacing piecemeal, service-by-service contracts with enterprise-wide agreements.

Oracle's founder, billionaire Larry Ellison, has a close relationship with US President Donald Trump.