HSD aiming to save on software
- By Wilson P. Dizard III
- May 22, 2003
In a move that could significantly reduce how much it spends on software, the Homeland Security Department plans to negotiate with some three dozen vendors to forge enterprise agreements that will cover all sales to the department, sources said.
'I have heard that they want to negotiate enterprise licenses with Microsoft Corp. and Oracle Corp.,' said Bob Guerra, principal in Guerra, Kiviat and Flyzik & Associates of Oak Hill, Va. 'They are expecting the enterprise license price would take effect for all licenses.'
Such a unified buying structure would yield significant benefits, chief among them cost savings.Through the blender
'One of the problems [HSD] has is multiple licenses with different fee structures and conditions,' said James Lewis, director of technology policy at the Center for Strategic and International Studies in Washington, adding that HSD's 'CIO shop has been working to blend them. This is one of maybe two top priority Act items.' Chief infrastructure officer Bill Sylvester is overseeing the process of negotiating the enterprise agreements, HSD said.
Department officials did not reply to several recent inquiries on the subject.
Other sources said Symantec Corp. of Cupertino, Calif., and Cognos Inc. of Ottawa are among the companies that HSD officials have picked for the enterprise license negotiations.
'Microsoft is responding to inquiries by the Department of Homeland Security to help it understand how agencies that have already invested in our technology can leverage their existing agreements as well as take advantage of our current offerings,' Microsoft spokesman Keith Hodson said in a statement.
Oracle spokesman Michael Sperling said his company has commercial relationships with almost all of the 22 agencies that the Homeland Security Act of 2002 combined into the department. 'It is too early to make any assessment of how enterprise licensing is going,' Sperling said. 'It is our belief that we would be one of the vendors who would be involved in the enterprise licenses.'
Spokesmen from Cognos and Symantec declined to comment on the matter.Reduced prices
An industry source close to the negotiations said the enterprise agreement negotiation process partly is aimed at reducing the price HSD pays for software. In some cases, the department is looking for savings of as much as 40 percent over current contracts, the source said.
'The push-back is going to come from small businesses and resellers that are deploying' systems for HSD, another industry source said. The department must 'decide whether the savings are worth sacrificing their small business [procurement] goals.'
Some software vendors could have to advise the Securities and Exchange Commission that their expected revenue from HSD contracts will change as a result of the contract changes, the industry executive said. That's because the companies in some cases have already booked revenue expected from the HSD contracts that would expire or be cancelled.
'The government could save a ton of money,' one industry source said.