The Defense Department signed an up to 10-year, near $7 billion contract with Oracle intended to streamline fragmented licensing and intra-agency efficiency.

The Austin-based cloud computing and software company separately maintained different contracts across the agency. The government said this deal will optimize services and deliver hundreds of millions of dollars in taxpayer savings.

"Reducing fragmented procurement and advancing enterprise standardization will strengthen interoperability, reduce cybersecurity risk, and help us focus resources on resilient capabilities that can scale, integrate, and endure in contested conditions," said Barry Tanner, a spokesman for the Department of Navy.

The initiative "is designed to address those challenges by creating a more standardized and efficient path to Oracle cloud and AI technology tuned to support mission-critical scenarios," said Kim Lynch, Oracle's executive vice president of government, defense and intelligence. Oracle shares rose about 2.5% afterhours.