What Oracle’s Botched Obamacare Site Says About the Future of the Web

Klint Finley | Wired | March 7, 2014

It’s bad enough that the state of Oregon has paid software giant Oracle over $100 million to build a healthcare exchange site that doesn’t work. But it now appears that Oregon is stuck with Oracle, unable to simply hire another firm to finish the job. It’s the latest setback for the troubled Obamacare rollout, and it provides a classic example of an old-school IT provider lagging behind the new and more effective way of building massive web operations — the open source approach behind mega-scale websites like Google and Facebook.

Last September, as it became clear that the site wouldn’t be ready for the October 1 launch date, Oregon stopped paying Oracle. The company kept working until last week, when it pulled 100 contractors from the project, demanding $69.5 million for the work it had completed since September. This week, The Oregonian reports, the state agreed to pay $43.9 million of its outstanding bill to get Oracle back to work to finish the project.

You might think that Oregon officials would have been happy to see Oracle go, considering their $100 million site is still on the fritz. But making the service work properly will likely depend on knowledge held only by Oracle’s contractors. Oregon needs Oracle, at least for now. And that’s part of the problem: Oregon, like so many other IT customers over the years, is now locked into a contract with a vendor and has few options other than paying the company more or starting the project over from scratch...