Oracle closed a ten-year deal with the Department of Defense worth up to seven billion dollars. The Pentagon will receive on-premises software. Not cloud software. Not modern infrastructure. Software that sits in a room somewhere collecting dust and requiring a guy named Dale to reboot it every third Thursday.
On-premises means the DoD looked at every technological advance since 2015 and said no thanks. They want servers they can touch. They want hardware they can trip over. They want to pay Oracle for the privilege of running their own IT department like it's 2008 and someone just discovered virtualization.
Seven billion dollars buys a lot of things. It does not typically buy software you have to physically install yourself. But the Pentagon operates on a different wavelength. They watched everyone else migrate to the cloud and thought that sounds risky. Better stick with the model where we're responsible for every failure point.
Oracle stock moved on the news because investors love long-term government contracts. They love recurring revenue. They love the fact that the DoD just locked itself into a decade of licensing fees with a company that charges you for looking at their products too long. Every CTO in America knows Oracle's pricing model. You call for a quote and they ask for your firstborn.
Retail traders saw defense contractor adjacent and bought calls. They did not read the part about on-premises. They did not consider what happens when Oracle support calls back in six to eight business days. They just saw billion with a B and started fantasizing about their Robinhood account going green for the first time since they panic-sold Nvidia at a loss.
The contract runs through 2036. By then we'll have quantum computers and AI that writes its own code. The Pentagon will still be running Oracle 12c on a server farm in Virginia that requires a keycard and a blood oath to enter.
Photo by BoliviaInteligente on Unsplash
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