Army deals offer DOD price breaks
- By Bob Brewin
- Oct 17, 1999
The Army Small Computer Program last month closed out the fiscal year by signing two enterprise licensing agreements, offering Defense Department customers significant price breaks on key management software packages.
The new licensing agreements, the latest in a series of such deals with major software vendors, include a deal with Computer Associates International Inc. CA developed a new pricing model that will offer much better pricing than what is available through traditional licenses. SCP, headquartered at Fort Monmouth, N.J., also signed the last of its DOD-wide database management contracts, inking a deal with Sybase Corp. DOD signed similar agreements with Oracle Corp. and Informix Software Inc. this summer.
SCP has awarded a number of enterprise agreements in the last six months, including one with Tivoli Systems Inc. for enterprise management software. All of the agreements provide deep discounts based on the potential volume of business available either Army-wide or DOD-wide.
Under the three-year, $32 million blanket purchase agreement with CA, Army customers will pay for Unicenter TNG systems management software on a per-seat and per-server basis, instead of CA's traditional power-unit pricing formula. Under power-unit pricing, software running on high-powered servers capable of supporting multiple users connected to a local-area network carried a higher price than software running on smaller servers with a smaller pool of users or stand-alone PCs. In most cases, depending on users' requirements, the new pricing represents a significant discount, according to CA.
The agreement "forges new ground," said Mike Miller, senior vice president and general manager of North American sales for CA. "This is a great deal for the Army," he said, adding that CA had never before signed a deal in the commercial or government market that was not based on the power-unit pricing formula. But the company may extend the new pricing scheme across both markets.
Under the SCP contract, CA priced a three-year license for its Unicenter TNG software for Microsoft Corp. Windows NT servers at $2,562, while the license for the same software for Unix servers costs $7,918. Adelia Wardle, product leader for the contract at SCP, said ordering on the contract was "hot and heavy" through the last six days of the fiscal year. Organizations from the Army Materiel Command and the Army Forces Command were the primary initial customers. CA estimates that AMC will spend about $20 million with the company in the next the next three months, Miller said.
Wardle said the Sybase contract, signed Sept. 29, will provide DOD users with a 61 percent discount off the General Services Administration schedule price and put the value of that contract at slightly more than $12 million for one base year and an option year.
A spokesman for Sybase said the company cannot provide any details on its Army contract because of a legal "quiet period" before the release of its quarterly earnings later this month.