Homeland Security Saves Millions In Microsoft, Oracle LicensesHomeland Security Saves Millions In Microsoft, Oracle Licenses

The Department of Homeland Security, in a published update on its ongoing "efficiency review," reveals it was able to save $89 million in software licensing fees by renegotiating contracts with Microsoft and Oracle. Every other federal agency should be undertaking similar reviews.DHS secretary Janet Napolitano launched a department-wide efficiency review in March, and the agency is documenting where it's cutting costs, ranging from $95,000 in printing and mailing costs for event invitations sent by the Coast Guard (it's now using electronic invitations) to $90,000 at Immigration and Customs Enforcement by using existing vehicles in lieu of new ones.

Some of Homeland Securities biggest savings come in the form of a renegotiated enterprise license with Microsoft. The agency consolidated 487,000 licenses into a blanket software-and-maintenance agreement with Microsoft at a savings (or "cost avoidance") of $87.5 million over the next six years. Separately, Immigration and Customs Enforcement consolidated 200 Oracle licenses into one "unlimited" license at a savings of $1.5 million over the next year.

According to the federal government's IT Dashboard, Homeland Security has an IT budget of $6.2 billion in fiscal 2009, second in size only to that of the Department of Defense. Earlier this week, secretary Napolitano announced the appointment of a new CIO, Richard Spires, at Homeland Security. It will be interesting to see what other excesses Spires is able to wring from the agency's IT operations.

CIOs in the private sector have been renegotiating all forms of IT contacts over the past few years in an effort to maintain service levels in the face of declining budgets. CIOs in government, if they haven't already, should take a page from the same play book. Amid the push for efficiency and transparency in government IT, software licenses are a place to look.