Oracle pledges to cut your IT bill by 5%

Software giant Oracle is branching out into the total IT outsourcing business, with a guarantee to cut customers' IT bills by 5%...

Software giant Oracle is branching out into the total IT outsourcing business, with a guarantee to cut customers' IT bills by 5% a year for five years.

But there is a catch - the customer has to fit its business processes to Oracle's applications software, so that it can run without modification.

Speaking at the UK Oracle User Group (UKOUG) conference in Birmingham on Monday, Oracle's global marketing chief Mark Jarvis said the company would migrate outsourcing customers onto Oracle's latest software "for free", taking on its IT staff as Oracle employees and installing new hardware and networking infrastructure as necessary.

He said the offer would take Oracle into competition with existing outsourcing giants such as EDS and IBM, reflecting Oracle's confidence that companies can dramatically cut costs by using its latest software, including its 9i database and 11i applications suite.

But many users at the event were sceptical about the offer. One said that few firms would be able to run their businesses effectively on unmodified Oracle software. Another questioned Oracle's skills in running IT in firms across diverse industry sectors. Ronan Miles, chairman of the UKOUG, described the announcement as "astonishing".

Oracle is currently piloting the new business model with a US customer, and Jarvis expects the offer to hit the UK in about a year's time.

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