The Pentagon has entered into an agreement with Oracle worth up to $7 billion

In the first five years, the volume of the agreement will be about $3.31 billion. It will consolidate Oracle’s numerous existing contracts and licenses into a single procurement mechanism for the Pentagon, US Coast Guard and US intelligence community. The agreement was prepared by the Ministry of the Navy.

The Pentagon expects that centralizing procurement will eliminate duplication of licenses, gain greater insight into the use of software and reduce costs by at least $441 million over the life of the contract. It is also expected to improve the compatibility of information systems and reduce cybersecurity risks.

This is not about Oracle committing seven billion dollars in new funds, but about the marginal cost of the combined purchases of software, technical support and related services. Previously, the Pentagon entered into a similar agreement for $9.69 billion to consolidate purchases of Microsoft products.