This article first appeared on GuruFocus.
Oracle (ORCL, Financials) The enterprise software and cloud computing company won a 10-year contract with the U.S. military that could be worth as much as $6.99 billion if all option years are exercised.The arrangement includes a basic value of $3.31 billion for the first five years, with five option years that may take the total to over $7 billion.The contract includes Oracle software used in on-premises data centers across all military branches, the Coast Guard and the U.S. intelligence agency.It also enables agencies to buy cloud services, software applications, technical support and professional services via specific task and delivery orders.U.S. authorities said the consolidated procurement system will likely save taxpayers at least $441 million by decreasing fragmented purchasing and harmonizing technology across agencies.The arrangement is part of the Department of War’s Enterprise Software Initiative, which aims to streamline software acquisition and increase interoperability and cybersecurity.Oracle’s shares rose about 2% in after-hours trading following the announcement.Now, investors will be watching the pace of orders under the contract and how much of the potential $6.99 billion value will be realized.
