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Oracle Sued For 'Extortion, Lies' By Montclair State University 359

Posted by timothy
from the their-reputation-precedes-them dept.
angry tapir writes "Montclair State University is suing Oracle in connection with a troubled ERP (enterprise resource planning) project. Montclair's complaint, filed Tuesday in U.S. District Court for the District of New Jersey, states that Oracle made an array of 'intentionally false statements' regarding the functionality of its base ERP system, the amount of customization that would be required, and the amount of 'time, resources, and personnel that the University would have to devote.' 'Ultimately, after missing a critical go-live deadline for the University's finance system, Oracle sought to extort millions of dollars from the University by advising the University that it would not complete the implementation of the ... project unless the University agreed to pay millions of dollars more than the fixed fee the University and Oracle had previously agreed to,' it adds."
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Oracle Sued For 'Extortion, Lies' By Montclair State University

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  • by s_p_oneil (795792) on Thursday December 15, 2011 @09:55AM (#38382298) Homepage

    It's not lying, it's marketing and/or sales.

    • by ByOhTek (1181381)

      Agreed. I've read a lot of product white papers, and they manage to say what sounds like a whole lot, but when you read it, you find out it isn't actually saying anything much really. That doesn't account for the incorrect estimates though.

      • Re: (Score:2, Insightful)

        by ibib (464750)

        Institutions and companies as well for that matter, REALLY need to learn how to; read contracts and agreements, formulate needs and demands (preferably with help of a third party) and not to trust the seller of a product or service.

        How hard can it really be? REALLY!? (If you really wanted and devoted resources to it, that is)

        • Re:It's not lying (Score:5, Insightful)

          by BLKMGK (34057) <morejunk4me@hotm[ ].com ['ail' in gap]> on Thursday December 15, 2011 @11:32AM (#38383456) Homepage Journal

          If you had bothered to read the source article it sounds like the University did just that. Their documentation appears solid as to failures, they had a pretty extensive list of requirements, they used real-life use cases tests for bidding companies to demo against, they documented ALL interaction with Oracle, and it looks like this was a FFP contract that Oracle may have simply underestimated. It's interesting that Oracle stated they had a similar project ongoing for another school that was going well - with FOUR times the resources being applied than this university had available but that this fact wasn't revealed to them. Oracle supposedly demonstrated an applicant management process during their demos and apparently represented this as part of their base capability - then at implementation revealed that it was 3rd party code or libraries that would have to be purchased. Gee, no vendor would ever do that right?

          What it will be to a court to decide is if the issues that were run into were as a result of the university or Oracle but the university certainly seems to have documented their case well. Your conclusion that they somehow simply believed and trusted Oracle on this doesn't appear to match up with the source article - perhaps you didn't bother to read it and simply read the sparse /. summary?

          • by Dishevel (1105119) on Thursday December 15, 2011 @11:36AM (#38383532)

            perhaps you didn't bother to read it and simply read the sparse /. summary?

            Perhaps you forgot where you were? :)

          • by smartr (1035324)

            they documented ALL interaction with Oracle

            With a bigger multimillion dollar budget to have document drones documenting everything? I'm not saying Oracle is in the right here, but I believe the article said they initially made a spec with 3200 items, which apparently became a moving target. Perhaps the school should have contemplated a bit more before biting into a massive ERP cookie provided by Oracle. Caveat Emptor.

            • Re:It's not lying (Score:5, Informative)

              by gstoddart (321705) on Thursday December 15, 2011 @12:38PM (#38384364) Homepage

              I'm not saying Oracle is in the right here, but I believe the article said they initially made a spec with 3200 items, which apparently became a moving target.

              True that the article said they made a spec with 3200 items, but the article doesn't say that spec became a moving target. MSU wasn't changing their requirements (at least, TFA doesn't say that).

              It seems to suggest that the demo Oracle presented which showed that it could meet "95 percent of MSU's business requirements" out of the box:

              Before it won the bid, Oracle also conducted live demonstrations of its software that used test scripts prepared by the university. One demonstration involved "a robust on-line application process for Undergraduate and Graduate Admissions ... that it falsely represented was an existing part of the base system and satisfied the University's requirements," the complaint states.

              But in fact, "Oracle's ultimate implementation plan was to sell the University a third-party product called 'Embark' to satisfy those requirements, suggesting the initial 'live' demonstration was rigged," it adds. A "substantial" amount of customization was needed in the end, according to the complaint.

              I've seen demos in which the vendor is claiming that the software already does the things you need it to, only to find out that what we actually got shown was an add-on component we'd have to buy, as well as a large amount of customization we'd be expected to pay for. In other words, the demo was pure bullshit, and we called them on it. It also means that the estimate they provided didn't actually include the functionality you said was mandatory ... you get some fraction of that, and they expect you to pay for what they didn't provide you. They just don't tell you until after the fact that they didn't sell you what they told you they were going to.

              It's like being shown a car, only to find out that it doesn't really come with an engine, the transmission hasn't been done yet, and if you try to use the wipers something will catch fire.

              Not saying Oracle did all of this here ... but it's far from unprecedented for the demo you get shown that 'proves' you meet all of the criteria has a bunch of huge gaps in it the vendor has no idea of how to address. At that point, it's hard not to see it as a little fraudulent.

              • Re:It's not lying (Score:4, Insightful)

                by steelfood (895457) on Thursday December 15, 2011 @01:49PM (#38385200)

                Which is why it's important to maintain a relationship with a known honest vendor. It's not just to support that vendor per se, but also to minimize the risk involved in consulting a different vendor for future projects.

                It's not surprising that people get away with these things. Management is usually not competent when it comes to discerning the BS from the truth at such a low level. They're typically too removed from the technologies involved, and too concerned with other things such as budgets and service agreements. And many people don't realize that a software demonstration is not necessarily indicative of the cabilities of the core product, but of the potential of the core product. Ensuring that the potential featured becomes a capability is a part of the contract negotiation process.

                That's why it's important to have actual senior developers, or low-level managers, involved in the process. People who work with software will be able to tell what the software can conceivably do, and what it cannot do, especially within a given timeframe.

                Not that I'm saying MSU is in the wrong here. But the lack of general expertise in the area makes them susceptible to such fraudulant practices. It's like walking around with your purse hanging in the back and the zipper open, with the wallet on top.

                • Re:It's not lying (Score:4, Interesting)

                  by gstoddart (321705) on Thursday December 15, 2011 @02:02PM (#38385428) Homepage

                  Not that I'm saying MSU is in the wrong here. But the lack of general expertise in the area makes them susceptible to such fraudulant practices

                  I will be curious to see how this plays out ... documenting everything to be able to say that Oracle lied to them about the capabilities of the software and then demanded more money ... well, that might make them less susceptible to these fraudulent practices.

                  If Oracle really did lie to them and try to play a shell game whereby they expected the university to pay extra for functionality they were promised was already there ... well, I'd like to see Oracle held to account for that one.

                  As I've said elsewhere in this thread, I once worked with one a project with some Oracle software which didn't do half of what they claimed it did. I certainly believe the university was sold a bill of goods, only to have Oracle turn around and say "well, it doesn't really do that, this part is an add on you have to buy, and we really have no idea how to do this part, but if you wait for the next revision we're sure we can figure it out".

                  Sadly, I've seen software sold with half truths and bald-faced lies before. Why it hasn't led more of them into court, I will never understand.

          • Re:It's not lying (Score:5, Informative)

            by Ex-Softie (2532638) on Thursday December 15, 2011 @02:28PM (#38385840)
            In the late 90's I was CTO for a major company. We had to upgrade Oracle DB and Financials due to Y2K requirements. The upgrade repeatedly failed in testing. All work was done by Oracle Consulting. The cost overrun was almost $500k, and it was subsequently uncovered that the problem was an Oracle bug that stomped its own memory, causing database corruption. They refused to refund the costs despite its being Oracle's fault. So I can well believe that the university in this case was duped.
      • Re:It's not lying (Score:5, Informative)

        by v1 (525388) on Thursday December 15, 2011 @11:01AM (#38383056) Homepage Journal

        That's why you have lawyers on retainer to hand these to for review before signing anything. They either hand it back to you and say "looks good" or they tear it up and toss it in their bin and say "we need to talk".

        Any decent lawyer can spot BS in a contract. Longer contracts just take longer to examine, they don't add a lot of risk of missing something if the lawyer is any good.

        I think it's safe to assume that a university has and uses intelligent lawyers and that they have a case. But time will tell.

        • by MarkvW (1037596)

          It is way less about spotting BS in a contract, than it is about two other things:
          (a) anticipating eventual outcomes. Sometimes you need to hire multiple experts just to anticipate all the crap that can go wrong, so that you can provide for it in the contract; and
          (b) getting the client to a point where the client will walk away if it doesn't get what it wants. Sometimes clients get seduced by particular vendors and it is very hard to explain in non-legalese how the contract could end up leaving them high

    • Re:It's not lying (Score:5, Insightful)

      by fsckmnky (2505008) on Thursday December 15, 2011 @10:01AM (#38382368)

      It's not lying, it's marketing and/or sales.

      Right. Just like how the universities tell everyone how much better their lives will be, if we all just go $60,000 in debt and sign up for classes.

      I find it ironic that the institutions that aggressively market themselves, seem to be highly susceptible to the marketing of like institutions.

      That said, if Oracle did indeed promise, under contract, to complete project X for Y amount of money, and it's not complete, then good for Montclair. Get the funds back, or make Oracle finish the job. Otherwise, it'll be the students or the taxpayers paying for it, at some point, after the risk transfer process trickles down.

      • Tuition math lesson (Score:5, Interesting)

        by Anonymous Coward on Thursday December 15, 2011 @10:16AM (#38382538)

        A four-year degree at an in-state school should not cost more than $15-20,000 including fees. If you went $60k into debt for school, consider that a $40-45k math lesson. Teach your kids that one at home so they don't have to pay for it again.

        • by luis_a_espinal (1810296) on Thursday December 15, 2011 @10:33AM (#38382728) Homepage

          A four-year degree at an in-state school should not cost more than $15-20,000 including fees. If you went $60k into debt for school, consider that a $40-45k math lesson. Teach your kids that one at home so they don't have to pay for it again.

          Bingo. My sister went to a private university (local) all the way to grad school for a STEM degree, and she piled no more than $45K (again, in a private school.) I went to grad school in a in-state university, and my total debt was about $25K. My other sisters went also to in-state schools (biomed, fine-arts, PT) and none racked that much of debt either. The only person I know that justifiably had like $60K in debt was this guy who went to grad school in PT with a lot of specialized training. Medical and law students would be the other camp in which I could see a justification for such an amount of student loan debt.

          OTH, people getting into $60K for a degree in History or Social Science is just absolutely retarded. I could understand that debt in those degrees if the student 1) goes to a private Ivy League school, and 2) go all the way for a Ph.D. But for a B.A in those fields?

          I mean seriously, I see these shows and interviews with people being burdened with $60K, $80K even $100K and not having a job or a job that pays well to get rid of that debt, and when they get asked what degree they have, we don't hear STEM or law or medicine, we don't hear post-grad education. We hear 4-year degrees in History or Social Sciences. WTF? WTF? WTF??????

          Yeah, universities keep racking up the cost of education, but let's not delude ourselves into blaming these institutions when people rack up student loans on 4-year degrees with no market value. There is a difference between a freshman entering school and not knowing what to study, and that same person cruising around for the next 4 years without ever thinking "shit, how is my education going to get me a job with which to repay by debt?" Living life in cruise control is a stupid and costly way of doing things.

          • by Anonymous Coward on Thursday December 15, 2011 @10:38AM (#38382800)

            Medical and law students would be the other camp in which I could see a justification for such an amount of student loan debt.

            Law school is not worth it. Many recent law graduates are regretting their decision (and their debt) because the legal market dove just as much if not more than the housing market. There aren't jobs. If you want to have >$100,00 of loan debt and work as an insurance agent, go to law school.

            In summary, if you are thinking about law school, RUN! RUN AS FAST AS YOU CAN!!! If you are in your first year of law school, and you aren't in a top 10 institution or in the top 10% of your class, cut your losses and RUN! RUN AS FAST AS YOU CAN!!! Student debt can't be discharged in bankruptcy! You will be SCREWED if you stay in!!!!

          • by ae1294 (1547521)

            Yes because an 18 year old out of high school understands all that you just said and not that college = high paying job. I'll get off your lawn now...

          • by Colonel Korn (1258968) on Thursday December 15, 2011 @11:21AM (#38383298)

            OTH, people getting into $60K for a degree in History or Social Science is just absolutely retarded. I could understand that debt in those degrees if the student 1) goes to a private Ivy League school, and 2) go all the way for a Ph.D. But for a B.A in those fields?

            Both of your points are misguided.

            1) Ivy League schools are the best in the country for avoiding debt. The Ivies I know stopped including student loans as part of financial aid. They replaced them with grants. Furthermore, comparing the financial aid offered by an Ivy to the same package offered to the same student at a non-Ivy private school, the Ivies tend to be much more generous. I went to an Ivy before they eliminated student loans, but even then they had a max loan amount of about $20k for 4 years.

            2) PhD programs, even in history and other social sciences, don't involve debt. The department pays the student, not the other way around.

            A student who goes to an Ivy League school for a history degree and then gets a PhD in the field will have no education-related debt whatsoever.

          • by Dhalka226 (559740) on Thursday December 15, 2011 @11:54AM (#38383796)

            I guess it depends on what we're including in the cost. I went to Illinois State in the early 2000s, an in-state school and not a top-end one. All told it cost me in the area of $10,000 a year, which included the tuition and the various fees, and housing. Looking at the webpage for the current rates*, it looks like about $18,500 for tuition + board (I'm honestly shocked, wow). The breakdown is about $10k tuition + $8k housing.

            Obviously if you take housing out, that fee would drop substantially -- but that is a limited opportunity for people who happen to go to a school close enough to commute to. Otherwise the choice is living in an apartment nearby and you're just shifting the housing cost into somebody else's pocket; it's still an expense of attending school.

            By comparison, looking at the University of Illinois website right now (which is a good school) tuition/fees run $13,658 for residents, which does not include housing. For a room you share with somebody else and a meal plan, tack on another $9,714 a year for a total of $23,372. Per year.

            None of these numbers include books or doing anything other than marching from class to class and back to your dorm with an occasional stop to eat (not that I advocate putting anything else into your debt), by the way. So they are all I'd say around $1,000 a year low for books alone. (And incidentally the stat I was given when I started college was that only something like 20% of students would actually complete their degree in four years.)

            I'm sure that location affects things somewhat (Illinois is not a cheap state and I'm sure something like South Dakota would be cheaper), but perhaps the disconnect hinges on "debt." I think it's pretty easily demonstrable that the cost of these educations can very easily reach and exceed $60,000 over a four-year period without going to Harvard or Yale or any such. Whether or not you go into that much debt depends on a lot of things, chief among them whether or not you are also working while you attend college and how much, how much various financial aid you manage to accrue, and of course if you spend a lot of time going out and partying or anything that like that eats into your money and prompts you to let more of the other monies come from debt instead of income.

            I'm perfectly willing to assume that prices may be a lot cheaper elsewhere, but unless you attend Bumblefuck Egypt School of Whatever as an in-state student living at home, or are trying to compare the costs of a 1970 education to todays (just look at the comparison from early 2000s to now!), I have an extremely hard time believing something like 15-20k for an entire four year degree is within the realm of feasibility. If you're paying nothing but tuition, yeah, maybe.

            There is a difference between a freshman entering school and not knowing what to study, and that same person cruising around for the next 4 years without ever thinking "shit, how is my education going to get me a job with which to repay by debt?"

            I don't disagree, but at the same time most colleges are just fucking terrible at teaching you skills needed to get and do well in a job; their reward primarily is the piece of paper at the end and possibly some connections you make in the interim, not what you are actually taught. When this is brought up to people we tend to be told that university isn't job training, it's about getting an education, and that people who want that should go attend a vocational school. There is a disconnect there. People should go tens of thousands into debt to "upgrade" to a four-year degree that doesn't teach them things they're going to use in their job, but still need to make sure they choose a degree that is going to get them a job? It's not logically impossible, but it is clear evidence of a problem (that universities are happy to exploit).

            * Here's a good one, and a great example of another problem. I used their "cost estimator" and told them I

            • by Solandri (704621)
              We're looking at opportunity costs. You need housing and food whether or not you go to school, so those costs should not be included. (Unless the school's housing and/or meal plan costs significantly more, in which case you should including the cost above regular housing and meals. You should also be asking yourself why you're living on campus and eating in the cafeteria.)

              If you don't look at it in terms of opportunity costs, someone could add up their housing and food expenses, and claim they have $2
              • by lyml (1200795)
                If you want to look at it as an opportunity cost you also have to add whatever opportunity you are missing, e.g. the wage for a full time job.
          • by Bucky24 (1943328) on Thursday December 15, 2011 @01:40PM (#38385092)
            Currently at the University I went to, tuition is $4,000 per quarter. That's $12,000 per year. In four years a student could rack up $48,000 in loans and that's just to pay for tuition. Then (if they aren't lucky enough to live near a good university) they will probably pay extra for housing. That goes for another $3,000 a quarter if you live on campus, or another $36,000. If you live off campus, average rent is about $600-$900 for a room (its a college town), and often you can only find rooms for $600 if you split with someone else. At ten months for a school year (September-June, I think I counted that right?), that can be as high as $9,000 a year, still $36,000, and at the low end its still $24,000 a year. And, bear in mind, this is assuming a full course-load. If students want to take only 2 classes then their tuition drops... to $3000 a quarter. And they have to go to school for longer because they don't have enough time in 4 years to finish their degrees. Going to school full time, you CAN work part time, but its difficult (I know because I did it, and was lucky enough to get a job in my field of study). That can pay for rent, maybe, and food/utilities/ect.

            School is very difficult to afford for those who's parents are rich enough to disqualify them for grants, but not rich enough to actually be able to push them through college (my parents are this way-I was disqualified for grants because they own a second property, a property that they can't sell because of the market).

            The last year I was in school, an entire major was removed, due to budget constraints. It was social sciences, which, from your post above, I can see you think is useless. However, right after, they created a new major: Judaism. You can currently get a Bachelors degree in Judaism from this University. How is that any more useful then social studies (which actually does have SOME uses)?

            So tell me, who's fault is it that tuition is so high? Even people who are in "useful" majors like myself had to get loans, and I was one of the lucky ones who could get a job (again, college town, even little jobs in coffee shops get snapped up very quickly). I could go on to contrast the cost against the quality of education I received, but that's not really the point.

            While I agree that if you're going to go $60,000 into debt for a history degree, you should stop and rethink what you're doing, but it is very very easy to get that much into debt simply by going to a University, no matter what your major. Maybe it's different where you come from?
        • by Anonymous Coward on Thursday December 15, 2011 @10:33AM (#38382738)

          Tuition and fees? In 2011-12, public four-year colleges charge, on average, $8,244 in tuition and fees for in-state students. Per year

          Books? which at four-year public colleges in 2011-12 is $1,168 per year

          You mean you have to LIVE too? The national average in 2011-12 for four-year public college students who live on campus is $2,066 (off campus $1,082) These are expenses that a college student has to pay that a non-student doesn't. Per year

          Average cost of a four-year degree at an in-state school for someone living off-campus?

          (8244+1168+1082)*4 = $41,976

          Did you skip the math classes?

          Citation: http://www.collegeboard.com/student/pay/add-it-up/4494.html

        • by Runaway1956 (1322357) on Thursday December 15, 2011 @10:41AM (#38382836) Homepage Journal

          I'd like to know in what year you managed to complete four years of college for 15 to 20 thousand dollars. That much money wouldn't have paid for basic tuition in several decades. And, that's assuming that your mom and dad lived so close to the university that you could live at home and commute.

          http://web.saumag.edu/international/tuition-scholarships/cost/ [saumag.edu]
          At SAU, which is your typical "in-state school", 4 years of education is going to cost about $60k. That doesn't include books, of course, or snacks, or any damned thing, except the tuition. Projects, supplies, transportation, a night out once in awhile, toothpaste and soap are all additional.

          Maybe you're referring to a vocational / agricultural education, in a local community college? Yeah, you can get by for a whole lot less,

        • Re: (Score:2, Informative)

          Dont know where you get your numbers from.

          USA Today: In 2009-10, average published tuition and fees for in-state students at public flagship universities in the U.S. are $8,353, compared to $7,797 at all public doctorate-granting universities and $7,020 at all public four-year institutions:
          http://www.usatoday.com/news/education/2009-10-20-college-costs_N.htm [usatoday.com]

          Annual in-state commuter student tuition at state schools in my area

          Delaware - about 11,500. http://www.udel.edu/admissions/finance/ [udel.edu]
          NJ Rutgers - $12,755

      • I find it ironic that the institutions that aggressively market themselves, seem to be highly susceptible to the marketing of like institutions.

        My theory there is that they believe the shit they are feeding customers. Since in their minds they aren't lying, they don't think other companies are either.

      • More data? (Score:3, Insightful)

        by cowboy76Spain (815442)

        I would like to know a little more about how the project developed before forming an opinion.

        My experience with public organizations is that higher-ups in the administration are all for it ready to take merit, until they realize how much work it does take. They organize a functional group including only the bosses, who happen to(*):

        • Don't have too much time for meetings/extra work.
        • Don't really know how things really work at lower levels.
        • Think that their asses are covered.
        • Want everything at everytime comp
    • Predictable response from Slashdot:

      "Stupid sales/marketing drones. It's Oracle, of course. They should've asked technical support, then they'd get the real answer. These things always take five times as much money as the salesman says."

      In January 2012 there will be a story on some major project with high visibility that is suffering cost overruns. Slashdot will respond.

      "How can it take so long? That's what you get for hiring Lockheed (or whomever). Here's the solution, it'd take three weeks and cost a tenth

      • by mwvdlee (775178)

        But is it a predictable response because it true?

      • by ArsonSmith (13997)

        So you agree that the mostly technical Slashdot community consistently points out the ineptitudes of non-technical managers?

    • Re:It's not lying (Score:4, Insightful)

      by ackthpt (218170) on Thursday December 15, 2011 @10:50AM (#38382938) Homepage Journal

      It's not lying, it's marketing and/or sales.

      It's voiding a contract.

      Happens all the time. Not only one IT projects. This is where you need to write into the contract the clause - "failure to meet agreed upon time and goals will be paid for by the contractor to completion"

      Going over budget on public sector contracts has at least a century of tradition behind it.

    • by daem0n1x (748565)
      It they win this suit, it's the end of IT industry as we know it. And construction and other industries, too. Who would have though of this, projects delivered in time and budget? OMFG, we're all going to diiiiiie!!!!
      • The question becomes how long will it take for the culture to shift when it has long become accustomed to underbidding.
      • by swb (14022) on Thursday December 15, 2011 @12:37PM (#38384340)

        I thought the way this was managed these days was with contractual incentives.

        The seller wants $100 dollars for a project. The buyer wants to pay $50 dollars for the project.

        Normally, the buyer and the seller would negotiate some price, say $75, with generally no timing.

        Now what seems common is that the buyer negotiates to pay $75 with completion guaranteed on some date. The buyer also negotiates incentives and penalties -- if the project is done earlier, there's some extra money for early completion, and for every N units of time the project is late, the buy deducts money.

        The early completion bonus is capped to mitigate sloppy work as well as to keep the agreed completion date realistic, and the project actually has to function right, with the bonus sacrificed for problems that crop up.

        They do this with highway projects -- I lived blocks from a billion dollar freeway project and it was amazing to see it done about a month early -- the vendor got a bonus.

    • Oracle? Evil? Never!
  • It's Oracle. (Score:5, Insightful)

    by Anonymous Coward on Thursday December 15, 2011 @09:56AM (#38382316)

    Seriously... what did they expect?

    • Re:It's Oracle. (Score:5, Insightful)

      by erroneus (253617) on Thursday December 15, 2011 @10:07AM (#38382428) Homepage

      People and organizations have to learn the hard way... on an individual basis. Oracle is everywhere and is quite visible. People who don't understand make some presumptions and follow the "nobody ever got fired for buying...[usually Microsoft, but in this case Oracle]" notion and try to make the safest decision possible.

      My first knowledge of Oracle's personality came to me when I learned they price their software based on the performance of the hardware you are running it on. So the more expensive the hardware you run, the more expensive Oracle's software becomes. Something strikes me as terribly wrong with that model. (And yes, I know other vendors do this too... still strikes me as wrong. If you want to upgrade your hardware, suddenly you are in violation of your software license?) Once I learned they were willing to exploit [tax?] people and businesses who are able to spend more or require better, I learned all I needed to know about Oracle and their mindset. They don't price and value their product on their own merits, but on the merits of who, how and where it is to be used. If McDonald's operated this way, the results would be interesting wouldn't they.

      • by jbolden (176878)

        You should have seen Oracle's pricing in the mid-late 1990s. I always feel like comparatively they are giving it away.

      • Re:It's Oracle. (Score:5, Insightful)

        by dnaumov (453672) on Thursday December 15, 2011 @10:43AM (#38382868)

        They don't price and value their product on their own merits, but on the merits of who, how and where it is to be used. If McDonald's operated this way, the results would be interesting wouldn't they.

        No, you are confused. Noboby in their right mind prices their products based on their own merits. You price your products based on what the market will bear and pocket the profit. Economics 101.

        • by zooblethorpe (686757) on Thursday December 15, 2011 @02:07PM (#38385492)

          They don't price and value their product on their own merits, but on the merits of who, how and where it is to be used. If McDonald's operated this way, the results would be interesting wouldn't they.

          No, you are confused. Noboby in their right mind prices their products based on their own merits. You price your products based on what the market will bear and pocket the profit. Economics 101.

          A little history for you first.

          The Quakers in the 1800s developed a reputation for fair dealing. They did a couple things in their business transactions that were unusual, and widely regarded as equitable -- 1) they set a price and that was the price, no haggling or shystering; and 2) that price was based on a reasoned estimate of the value of the time and materials that went into the product or service being sold. They made a living in their fair dealings, and did well by themselves. This is a large part of the reason that "Quaker" became a favorable brand image in the US, such as Quaker State Oil, or Quaker Oats, complete with a smiling picture of a man in Quaker clothing as part of the label.

          There's a difference between making a living, and making a killing. US-style business anymore seems much more about killing, and as we're discovering with the state of the economy these days, it's awful hard to make a living this way. Many others have described how mass greed ultimately destroys value, and consistent overpricing to ensure profit -- not just to cover costs and a bit extra for room to grow, but instead deliberate excess as part of the dream of getting something for nothing -- is sucking the value out of everything around us. It's wholly unsustainable.

          But it seems that's taught in the higher-level classes, not at the 101 level. I'm guessing many of the movers and shakers in the US economy never got that far in their studies.

      • PeopleSoft (before Oracle bought them) had an even more draconian pricing model. It was based on total gross revenues. They even require specific documentation and audits of your income. This sounds so much like an organized crime racket I'm stunned they got so large doing it.

        "Okay, so how much with this great ERP system cost."

        "That depends. How much do you make?"

      • You just built a small compute cluster using popular hypervisor, with three hosts, each with 2x8-core physical CPUs.

        You plan to run a few Oracle VMs on this cluster.

        You are advised by Oracle to license all of the physical cores in your compute cluster, because those VMs can (in theory) move around and run on any of the physical CPUs in the cluster.

        You tell Oracle to go and f*ck themselves and opt for a DBMS with a less retarded licensing model.

        -- ab1
      • Microsoft currently charges about $10,000 per processor for SQL Server. They've had this pricing model for over a decade and still companies shell out the cash. Always amazes me.

        • by kotj.mf (645325)
          I'd love to pay $10,000 per processor for Oracle. List price for Oracle DB, Enterprise Edition, is something like $47,000 per CORE.
    • Re:It's Oracle. (Score:5, Insightful)

      by john82 (68332) on Thursday December 15, 2011 @10:11AM (#38382474)

      What did Montclair expect? Let's see: Legally binding contract. Contract not met. Customer sues for breach of contract.

      Seems to me that Montclair has the upper hand here. It all falls on the conditions of the contract.

    • Re:It's Oracle. (Score:4, Interesting)

      by HerculesMO (693085) on Thursday December 15, 2011 @10:17AM (#38382540)

      We are running a SAM project here (software asset management) and Oracle is one of our biggest offenders. They have the most weird, complex, and obnoxious licensing terms in their contracts, but the problem is we USE IT A LOT. I'd happily suggest people to swap off, but since I'm far from a DBA my word carries no weight, and even if it did, there's a lot of politics in play that keep it planted firmly.

      I am hoping that after the discovery of this project and seeing how much money we piss away on Oracle (needlessly), that people's eyes will open. This behavior really is just much of the same from this company.

  • This is why... (Score:5, Insightful)

    by dremspider (562073) on Thursday December 15, 2011 @09:58AM (#38382334)
    When you purchase something like professional services of a new system, you need to make sure that throughout the process you are receiving and own all the code and documentation and have at least a high level overview of what is going on. Too many people just say "Make this XYZ system for me, heres money to do it" and then expect to be barely involved with the process from there on until the product is done.
    • The code has nothing to do with it. Right now Oracle could send its entire codebase to the university yet it would not serve them (they would have to hire people, train them, and do the project)

      That said, having been in a lot of projects in public administration, I agree that involment is the key. A lots of higher-ups feel themselves "safe" and think that they have all the time of the world to make up his mind about what they want (and even better, many of them think that they know the entire university and

  • by Megaweapon (25185) on Thursday December 15, 2011 @09:58AM (#38382340) Homepage

    Pray you do not anger Him further.

  • Ellison will rock up to court, invite the judge and jury to party hard on one of his many yachts and justice will be served.

    He is just that awesome.
    • by ae1294 (1547521)

      Ellison will rock up to court, invite the judge and jury to party hard on one of his many yachts and justice will be serviced.

  • by Anonymous Coward on Thursday December 15, 2011 @09:58AM (#38382344)

    Any company/university who believes the sales guys, without doing their own evaluation of the software, deserves to waste millions and millions to implement the software. In my 15 years I've seen this happen more often then not. Ya, it sucks, but let the technical people choose products and negotiate with the vendor instead of the management and lawyers talking to sales guys. You end up with parties that don't really understand the software (sales guys) talking to the upper management and lawyers who have no concept of the work it's going to take to implement. Doomed to fail. Every time.

    • by ByOhTek (1181381) on Thursday December 15, 2011 @10:05AM (#38382402) Journal

      This isn't just the sales guys, even from TFS, this is an initial contract that had to have been breached by at least one party, and Oracle is now requiring millions of dollars to fix the issue caused by the breach. The university is claiming the breach was by Oracle, and therefore the university should not have to pay.

    • by Joce640k (829181)

      Yep. I wonder how many actual programmers were consulted over Oracles numbers for "the amount of customization that would be required, and the amount of 'time, resources, and personnel that the University would have to devote".

      A simple "Do these numbers seem reasonable?" might have saved them this embarrassment.

      (Assuming they listen to the answer)

    • by geekoid (135745)

      You're an idiot.

      "without doing their own evaluation of the software,"
      they did that.

      ", deserves to waste millions and millions to implement the software"
      no one deserves to be taken advantage of.

      " In my 15 years I've seen this happen more often then not."
      N00b. Did you sue?

      " but let the technical people choose products and negotiate with the vendor instead of the management and lawyers talking to sales guys.
      yes, because IT is just FANTASTIC at getting deal and dealing with contracts~

      "You end up with parties t

  • Why there are so many cases about bad business practices about Oracle? 1) Oracle not honouring an agreement with HP to continue to support Itanium 2) Oracle failing to file profit returns correctly 3) Oracle sued for 'extortion and lies' I thought legal and management departments where more important than engineering departments in a tech company
  • Other side? (Score:5, Insightful)

    by Aladrin (926209) on Thursday December 15, 2011 @09:59AM (#38382354)

    Of course, we're only hearing 1 side of this. I can easily imagine how this could come to be:

    Oracle gives a quote that requires the University do things Oracle's way, on Oracle's timeline. University doesn't. Oracle then quotes a price to fix all the University's mistakes.

    I can't for a minute imagine that Oracle wrote a contract for a fixed price that didn't outline exactly what the duties of each side were, and exactly what was covered.

    However, I also can't imagine a University engaging in frivolous lawsuits.

    It should be interesting to see what the facts are, and how this plays out.

    • Having gone to college and seeing how bad they tend to screw things up, I could easily see this being the case. Of course, I went to a state school where you get the double whammy of crappy administration PLUS crappy government requirements. Because microbiology and astronomy totally helped my network admin degree.

      • Re:Other side? (Score:4, Insightful)

        by sensei moreh (868829) on Thursday December 15, 2011 @10:14AM (#38382508)

        Because microbiology and astronomy totally helped my network admin degree.Because microbiology and astronomy totally helped my network admin degree.

        If you wanted a vocational degree, you should have gone to a vo-tech school

        • Half credit. You can learn microbiology and astronomy at no cost to yourself. Also, you can learn IT without having to go to a vo-tech school (I myself dropped out of high school to do IT, and haven't made below $100K/yr for 10 of my 12 working years.

          If anything, vocational schools are more valuable, as you're going to be paid more to do a job that can't be outsourced (HVAC, electrician, plumbing, mechanic) vs a job you'd get with a four year degree that can be outsourced to $new_lowest_wage_english_speakin

        • Re:Other side? (Score:5, Insightful)

          by sourcerror (1718066) on Thursday December 15, 2011 @10:27AM (#38382666)

          Hate to break the news for you, but university is the new vocational school.

    • by DikSeaCup (767041)
      Having worked for a university for 18 years (-1 for the recent year I spent working for corporate America/India) I can easily see how something like that (university not doing things they way a company would suggest) would happen.
    • Re:Other side? (Score:4, Insightful)

      by Severus Snape (2376318) on Thursday December 15, 2011 @10:15AM (#38382518)

      Of course, we're only hearing 1 side of this. I can easily imagine how this could come to be:

      Oracle gives a quote that requires the University do things Oracle's way, on Oracle's timeline. University doesn't. Oracle then quotes a price to fix all the University's mistakes.

      I can't for a minute imagine that Oracle wrote a contract for a fixed price that didn't outline exactly what the duties of each side were, and exactly what was covered.

      However, I also can't imagine a University engaging in frivolous lawsuits.

      It should be interesting to see what the facts are, and how this plays out.

      Nail on the head. It worth noting that ERP projects are extremely difficult to implement and involve basically ripping up the whole entire infrastructure of an organisation and starting again. As well as being very costly and take years to get up and running. Half the time they aren't even worth the hit you take getting it up and running. When everything goes smooth and actually works, it's fantastic your organisation can make strategic decisions quickly and effectively, data becomes transparent across the organisation and systems become integrated. The problem is, this sort of situation that the university is now, is far to common.

    • by b4dc0d3r (1268512)

      Pracle sells a product that is "capable" of anything the buyer wants. The trick is, it costs more money to make that capability into a functionality. They sell software and customization, with the base software nearly incapable of doing anything. And they try to avoid trining your people on how to customize it, they want to charge for it if possible. This is how Oracle and SAP and any other large services provider really makes their "software" money.

      I sell you a copy of the .NET framework saying it can

    • by gl4ss (559668)

      dunno, tfa has this from oracle: ""When issues arose during the course of the project, it became clear that MSU's leadership did not adequately understand the technology and the steps necessary to complete the project," it stated. "Instead of cooperating with Oracle and resolving issues through discussions and collaboration, MSU's project leadership, motivated by their own agenda and fearful of being blamed for delays, escalated manageable differences into major disputes.""

      after that there's stuff like orac

    • by cthlptlk (210435)

      There are probably three sides...Oracle, the nitwits who bought the system, and the administrators who are pissed at both of them.

    • I can imagine Oracle screwed this up. If you have ever heard the asinine things that they require you to do, but remain willfully undocumented because they make no sense, it would not appear surprising.

  • by Anonymous Coward on Thursday December 15, 2011 @10:00AM (#38382360)

    "Instead of cooperating with Oracle and resolving issues through discussions and collaboration, MSU's project leadership, motivated by their own agenda and fearful of being blamed for delays, escalated manageable differences into major disputes."

    This certainly reads like code for "We promised more than we could deliver. Instead of giving us more money as we demanded, the university decided to try to force us to deliver on our promises."

  • by captbob2002 (411323) on Thursday December 15, 2011 @10:09AM (#38382444)
    Isn't this standard for their Peoplesoft product? We went through hell with it where I work years ago. Cost around 20 million more than it should have. Some folks lost their jobs, sadly, not the people responsible for that debacle. Ten years and that project is still bringing us "joy."
    • by gstoddart (321705) on Thursday December 15, 2011 @10:42AM (#38382858) Homepage

      Isn't this standard for their Peoplesoft product? We went through hell with it where I work years ago. Cost around 20 million more than it should have.

      I worked on a project several years ago involving some collaborative software from Oracle.

      The software was not mature enough to be out of beta, definitely not mature enough to be sold to customers, and in the end required vast amounts of resources over and above what we were told it would.

      In effect, they were selling snake oil, and they knew it. And, they wanted more money to deliver.

      Not saying this is in any way similar to what is happening at this university, but I know first hand Oracle isn't above selling you a product they haven't finished writing yet. In fact, I think it's part of their business model.

  • Good, bring 'em on (Score:5, Interesting)

    by Rogerborg (306625) on Thursday December 15, 2011 @10:09AM (#38382452) Homepage

    As one of the guys responsible for delivering on salesweasels' promises, I fully support customers being given a realistic appraisal of the time, effort and cost required to get them up and running.

    • by L4t3r4lu5 (1216702) on Thursday December 15, 2011 @10:19AM (#38382554)

      As one of the guys responsible for delivering on salesweasels' promises,

      It's ok, you're allowed to say "Engineer" here. You're amongst friends. :)

    • by ray-auch (454705)

      Problem is, unless all your competitors are doing that, you'll stop winning any business and rapidly be out of a job...

      Procurement processes, particularly public sector, are all biased towards lowest cost rather than honesty of cost, and box-ticking over real due dilligence, because it's more objective that way. Everyone (unless they are allready bust, or have so much business they can pick and choose - and then have hte nightmare of trying to resource it...) trys to get the deal by under quoting the base

  • I've seen this problem so many bloody times (and I've had to clean it up a handful of times), it's because marketing goes out and promises big when they don't really have a clue about what their product even is.
    Fire the sales guy(s) that sold them the product, and have people who actually understand which end is up fix the problem.
  • by pak9rabid (1011935) on Thursday December 15, 2011 @11:05AM (#38383096)
    Dr. Cole (President of Montclair State University): That was never a condition of our agreement, nor was devoting more personnel to this project!
    Larry Ellison: Perhaps you think you're being treated unfairly?
    Dr. Cole: [pauses] No.
    Larry Ellison Good. It would be unfortunate if this project happened to have any further costly delays.
    Dr. Cole: [under her breath] This deal is getting worse all the time.
  • by matthaak (707485) on Thursday December 15, 2011 @12:05PM (#38383926) Homepage Journal
    Working in Professional Services for another major enterprise application, I could really see this being the fault of either party. I think many in Professional Services (myself included) take a pragmatic approach to implementation. The focus is on getting something going that meets 90 or 95% of the requirements with a healthy dose of skepticism that anything beyond that is worth the cost. At some point, the customer has to pull the trigger, adopt and adapt. In the course of doing so, they will discover shortcomings and advantages that weren't envisioned initially, and the effort and cost of pursuing perfection initially can be saved for follow-up effort once all that real-world feedback is collected. I have found some University customers tend much more towards wanting the "ideal" solution on Day 1 and as a Professional Services provider, going that last 5 or 10% of the way to perfection can be an extremely frustrating, money-losing endeavor. At the same time, none of the above can be encoded in a contract that would ever get signed, so all you can do as a Professional Services provider is choose your customers wisely and know when to require time & materials contracts.
  • This is S.O.P. (Score:5, Interesting)

    by roc97007 (608802) on Thursday December 15, 2011 @04:21PM (#38387766) Journal

    Anyone who has worked either side in this type of project can tell you this (what Oracle is accused of) is standard operating procedure, not just for Oracle. The steps are usually:

    a) Agree to virtually anything. The intent is to get the contract. A practical schedule is actually a disadvantage, as we will see later. Don't worry too much about non-delivery clauses, they will never apply.

    b) Continue development until time runs out. Developers will be oddly calm as deadline approaches for reasons that will become clear later.

    (The objective here is to show competency, but with no serious intention of fulfilling the contract.)

    c) Miss the deadline.

    d) Allow hysteria to accumulate. Blame missed deadline on unrealistic scope and/or feature creep. Encourage panic.

    e) Present new proposal at higher price and tough out the fireworks. ("Go ahead and sue. We have more lawyers than you have employees.")

    f) $$ Profit!

    This works (usually) because the end product is often a critical replacement or enhancement to an integral part of the customer's business (eg, Billing, Customer Service) and the customer will look for the shortest path to being able to do business.

    It's common for the abused customer to threaten lawsuits, exceedingly rare for them to follow through. Kudos to Montclair for having the guts to go against a major corporation. It'll be interesting to see how this plays out.

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