Ellison and Benioff bury the hatchet and make nice
By Chris Kanaracus
Larry Ellison and Marc Benioff’s long-running public feud appears to be over, with the CEOs of Oracle and Salesforce.com making a joint appearance Thursday to extol the virtues of a new partnership they describe as financially sensible and strategically pragmatic.
“The best decision we ever made is to go with Oracle” for Salesforce.com’s infrastructure, Benioff said of a company he once accused of selling a “false cloud.” Improvements for cloud computing in Oracle’s new 12c database “are extremely important” to Salesforce.com and the vendor expects to cut its database server costs “in half,” he said. “I couldn’t be more thrilled to make this announcement with you today, Larry.”
“Salesforce.com and Oracle have some overlapping products, but there are far more opportunities to work together than to compete,” he said.
The companies announced a deal this week in which Salesforce.com, long a user of Oracle’s database, will standardize on Oracle’s Linux OS distribution, Java middleware and Exadata server platform. In turn, Oracle will integrate Salesforce.com’s software with its Fusion HCM (human capital management) and cloud-based financial software, and Salesforce.com will implement those products “throughout the company.”
In a joint conference call with the two CEOs, Benioff revealed that the deal is good for 12 years, not the nine years originally announced.
While there had been evidence of late that Salesforce.com wanted to move away from Oracle technology, that doesn’t seem to be the case anymore.
Oracle has “always been there for us,” Benioff said. “Now we’re at a critical point in Salesforce.com’s history. We have to make a decision. Is the infrastructure we’ve built on Oracle going to take us through the next one or two decades? The answer is yes.”
While it has never been clear how much of Benioff and Ellison’s feuding has been marketing-savvy theater rather than true animosity, the two CEOs treated each other with uncharacteristic warmth during the call.
“Salesforce.com has always been an important customer, but this is not about that,” Ellison said. “It’s about the partnership with Salesforce.com, making our products work better together. Salesforce.com is a big company now. Customers expect us to work together professionally toward the benefit of those customers.”
The “out-of-the-box” integrations planned will help customers who use Salesforce.com and Oracle software save money compared to the customized implementation projects that have been required in the past, Ellison said. He also characterized Salesforce.com’s CRM (customer relationship management) software as “market-leading,” in contrast to his labeling it in the past as an “itty-bitty application for salesforce automation.”
Oracle has acquired companies that use Salesforce.com and plans to leave some of those implementations in place in order to act as an “early adopter” for the planned integration, Ellison said.
Left unanswered was when these packaged integrations will be available, as well as what the companies’ new working relationship will mean for the positioning of Oracle’s own CRM products. In the past, Ellison has said many Salesforce.com customers “chucked” out the software in favor of Oracle’s CRM, but he offered no competitive updates on Thursday.
The Salesforce.com deal comes the same week Oracle announced a partnership with Microsoft that will see Oracle technology, including the Java programming language, play a more prominent role in Microsoft’s Azure cloud service. Ellison and Benioff indicated that their companies will seek to work on Java-related projects, but made no specific announcements.
Meanwhile, Salesforce.com will purchase 50 Exadata systems as part of the deal, Benioff said in a Twitter message on Thursday.
Oracle customers are using Exadata and Exalogic machines to develop on-premises private cloud infrastructures.
Benioff declined to say whether Salesforce.com could one day offer an on-premises version of Salesforce.com in much the same manner, but left open the possibility.
“Today we’re a fully multitenant shared architecture,” he said. “We don’t have a huge demand point from customers asking us to drop-ship hardware into their data centers. I don’t see that as something customers are asking us for. If that changed, we’re going to do what the customers want.”
To that end, some customers and industry observers may be hoping Ellison and Benioff still trade a few public barbs now and again.
“I certainly hope it’s not the end of the fun,” Benioff said. “We’ve always enjoyed working together and having fun with each other. Hopefully it will be the end to us getting a little too revved up at times.”
“I’m sure both Marc and I are going to try to continue to be entertaining, while making sure the entertainment never distracts from our commitment to work together,” Ellison said.
Benioff even invited Ellison to Salesforce.com’s upcoming Dreamforce event during the call, a gracious gesture in light of Oracle’s cancellation of a planned Benioff keynote during its 2011 OpenWorld conference.
“I would love to be there,” Ellison said of Dreamforce.
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