Why Is Marc Benioff Presenting at Oracle Open World?

Posted on October 9th, by thinkstrategies in Uncategorized. Comments Off on Why Is Marc Benioff Presenting at Oracle Open World?

I was astonished to learn that salesforce.com’s founder and CEO, Marc Benioff, is speaking at next week’s Oracle Open World customer/partner conference.

Although Benioff is an alumnus of Oracle and Oracle’s founder/chairman/CEO Larry Ellison was an initial investor in salesforce.com, there has been no love lost between them publicly because salesforce.com was conceived to compete against Oracle’s Siebel division long before it became a part of Oracle.

Benioff has spent the past decade ridiculing the inefficiencies of on-premise customer relationship management (CRM) software and other legacy enterprise applications, along with traditional hosting models associated with Oracle. Ellison has returned the fire with his own tirades about the impossible economics of the Software-as-a-Service (SaaS) model. And, Ellison’s lieutenants in the Siebel On-Demand division have made increasingly aggressive efforts to undercut the success of salesforce.com over the past year.

Yet, folks I know who are a part of the Oracle inner-circle have said that Benioff and Ellison have been able to maintain a warm personal relationship despite their public saber-rattling. And, Oracle has benefited from the fact that salesforce.com’s has relied heavily on Oracle database solutions since its inception as a key component of its service delivery infrastructure.

I always viewed Ellison’s diatribes against SaaS, and more recent rants about the cloud, as a subterfuge aimed at deflecting attention from this fertile marketplace.

But, Benioff’s appearance at next week’s Oracle Open World conference may represent more than an appeasement against these ideas and political detente between the companies. The title of Benioff’s talk is, “The Best of Both Worlds: Customer Success in the Cloud with Oracle and salesforce.com.”

While Ellison was not a fan of SaaS in public, Oracle has fully embraced the concept of cloud computing from a marketing perspective, especially since announcing its intention to acquire Sun Microsystems.

My guess is that folks in Oracle’s On-Demand Siebel division are pretty upset about Benioff’s Open World appearance because they figure they can also pitch the benefits of the cloud, without inviting a competitor to talk to their current and prospective customers.

The same is probably true for the senior executives and staff at NetSuite, another Oracle spinoff and Ellison SaaS investment, which has always viewed salesforce.com as a sibling rival but hasn’t been invited to the Oracle party even though most industry observers believed it is more closely aligned with Oracle.

Two and a half years ago, I suggested that Oracle would buy salesforce.com in a hostile takeover to derail its success in the SaaS marketplace. Now, I’m beginning to wonder if it may be a friendly acquisition to capitalize on its escalating success.

After I initially speculated that Oracle would make a hostile takeover bid, I suggested that Google would be the white knight who would come to salesforce.com’s rescue because it couldn’t afford to lose this valuable partner and channel to the enterprise market. I’m not sure if Google would make the same move if Oracle initiates a friendly takeover bid.

The bottomline is that Benioff’s appearance at next week’s conference, and the topic of his talk, is another indication that SaaS and cloud computing are becoming more mainstream ideas and more viable methods to increase the effectiveness of enterprise applications and data centers.

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