Editorial: Share and share alike

The SmartBuy program has had a rocky history, developing in spurts. The program received a significant boost late last month when officials unveiled an enterprise licensing agreement with Oracle — the initiative's biggest deal so far.

SmartBuy is all about savings. The theory is that the federal government should get a discount based on its collective buying power to drive down the cost of buying and maintaining common software products.

The Oracle deal offers federal agencies steep software discounts in excess of 80 percent in some cases.

SmartBuy has been more difficult to bring to fruition than procurement officials expected, largely because many vendors are left asking, "What's in it for me?" It is difficult to persuade companies that are doing well in their government business that they should sell to federal agencies at even lower prices.

The Defense Department launched its successful Enterprise Software Initiative in 1998. DOD officials put in time upfront to establish a united approach to licensing, and to teach officials in the public and private sectors to think of software as an asset to be managed rather than a commodity. Vendors resisted at first but soon saw the value of longer, deepr commitments from agency officials. Civilian officials prepared less and their program has suffered for it.

Most federal contractors have a sense of patriotism and a desire to do what is best for the country, but they must also answer to shareholders. And most vendors don't get any real benefit from SmartBuy. Therefore, it makes the program difficult to sell within their organizations. One can imagine the head of a company's federal group going to his or her boss saying the company has a deal where it is going to offer software at a reduced cost but without any promises of additional business.

Government officials say Oracle will benefit from lower sales costs. Most vendors, however, don't buy it. Vendors are under intense pressure to sign on to the SmartBuy programs. Unfortunately, these deals fall short unless they are good for agencies and vendors.

— Christopher J. Dorobek

The Fed 100

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