Oracle And Salesforce End Feud With Cloud Convergence

Tom Brewster is TechWeek Europe's Security Correspondent. He has also been named BT Information Security Journalist of the Year in 2012 and 2013.

Nine-year deal signed – some sceptical the Ellison and Benioff love affair won’t last so long

Having tussled with one another in the cloud market for years, Oracle and Salesforce have agreed a major deal that will see pieces of their portfolios merge.

The nine-year agreement will see Salesforce run its platform from Oracle systems, including Exadata, Oracle Database and Java Middleware kit. Oracle will integrate Oracle’s Fusion Human Capital Management and Financial Cloud products with Salesforce’s popular CRM services.

Oracle and Salesforce affair

Oracle CEO Larry Ellison © drserg ShutterstockOracle CEO Larry Ellison and Salesforce boss Marc Benioff, formerly an Oracle executive, have been involved in a verbal back and forth over what a true cloud is, with the latter believing no data centre kit should be based inside an organisation if it is going to claim to be using the cloud.

The Ellison vs. Benioff rivalry reached a new level in 2011 with some comical playground tactics, when Benioff had his Oracle World keynote rescheduled by his rival. He organised another speech close by in San Francisco.

And as Salesforce has seen its revenue grow exponentially, whilst it makes losses, Oracle has seen a slump in recent times, and has been comparatively slow on the cloud uptake. Oracle still makes a lot more money, however.

Both feel the time is right to come together, claiming it is in customers’ best interest.

“When customers choose cloud applications they expect rapid low-cost implementations; they also expect application integrations to work right out of the box – even when the applications are from different vendors,” Ellison said.

“That’s why Marc and I believe it’s important that our two companies work together to make it happen.”

Benioff added: “Salesforce.com’s CRM integrated with Oracle’s Fusion HCM and Financial Cloud is the best of both worlds: the simplicity of salesforce.com combined with the power of Oracle.”

Quocirca analyst Clive Longbottom said Oracle has failed in trying to make its Siebel CRM or PeopleSoft HR software cloud-based offerings, so the deal makes sense for Ellison.

“Oracle gets to sell hardware to a banner partner and gets a cloud-based CRM and salesforce automation offering that works,” he said.

As for Salesforce, it gets the chance to move its platform over to a better, newer architecture at a lower cost, and can access more prospects, Longbottom told TechWeekEurope.

“Will it last for nine years? Doubtful – the two main men are not the sort to play second fiddle to anyone.”

Having previously been a fairly closed company, Oracle is now opening up, having forged a deal with Microsoft this week. It will see Oracle’s database made available and supported on Microsoft’s Hyper-V virtualisation platform and the Microsoft Azure cloud service, alongside the competing Microsoft SQL Server.

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