Oracle, Salesforce, Larry Ellison, Marc Benioff, The Universe and Beyond

Oracle Set Its Sights On Salesforce.com is that what is really going on?

I have been working with Oracle since version 3.  Over the years at times it seemed when I observed Oracle I was watching a good soap opera.  I suppose that could be said of any big company. On the Latest Oracle Fiscal Second Quarter conference call it appears that Oracle now has set Salesforce.com in its sights.

Oracle Target = Salesforce.com

To use an Oracle term I use to hear over the years. When Oracle sets a company in its sight it means “shut off its oxygen”. Though in this case I would not think that is the intention.  So in this latest Fiscal Second Quarter conference call Salesforce.com got quite a bit of attention. In years past I use to listen to these calls, I dont take the time anymore. So I will rely in ZD to provide you some background.

December 19th, 2008
Oracle puts Salesforce.com in its sights
Posted by Larry Dignan @ 4:49 am

Oracle’s fiscal second quarter conference call was interesting on a couple of fronts. Here are a few observations:

No. 1: Oracle has a new whipping boy: Salesforce.com.

Check out CEO Larry Ellison’s comments about Salesforce.com, which totaled eight mentions (not quite SAP territory, but getting there), on the company’s second quarter conference call. The call came after solid earnings results.

In sales on demand, our primary competitor there is salesforce.com and this quarter was conspicuous and a series of competitive wins against salesforce.com. One which was our largest ever on demand or cloud computing, whatever you want to call it, a competitive win over salesforce.com was actually a replacement of salesforce.com.

The customer will be de-installing salesforce and replacing it with Oracle sales on demand so we’re very excited about that. That business is now growing.

When we compete head-to-head with salesforce we win more deals then we lose and that’s new in the last couple of quarters.

And then there was co-president Charles Phillips:

We have strong customer adoption at Siemens, we had a 12,000-seat win, that’s [inaudible] implementation and we’ll become the standard there. US Food Service where we beat salesforce.com about 7,000 users there. [Matreol] Healthcare displaced salesforce.com there and in West Pack where we also beat saleforce.com.

So we have had quite a bit of momentum there and I forgot to mention [Swisscom] as well, another 3,000 seats.

Add it up and you have eight mentions of Salesforce.com from Oracle. You can read that mean:

Oracle is going to buy Salesforce.com. The smack talk can preclude a merger. After all, executives said the company is still shopping for deals.

Or Oracle is acknowledging that Salesforce.com is moving upstream and becoming a threat and Ellison is sending a brushback pitch. Speaking of Salesforce.com obsession Oracle just announced a bunch of CRM on demand wins (statement).

To read the remaninder of this Article in ZDNET….

Oracle puts Salesforce.com In Its Sights

The Marc Benioff Larry Ellison Relationship

First To Better Understand what is happening a little background information…

If my memory serves me right, Larry Ellison was an early investor in Salesforce.com. At one point very early in Salesforce.com history Larry Ellison was asked to be on the Board of Directors by the Salesforce founder Marc Benioff a former Oracle Employee.  Then Larry Ellison was asked to resign from the Salesforce.com board due to a conflict of interest. That conflict of interest was Oracle launching a direct competitor called OraclesalesOnline.com. It is also my understanding that Marc and Larry Ellison knew each other before Marc went to work for Oracle. 

When Marc Benioff was at Oracle I had the pleasure of have a lot of dealing with Marc. Marc very early on was a true visionary. Marc always stood out from others. At Oracle he introduced a number of initiatives that had major impact on directions Oracle was taking. When Marc left  Oracle I felt it was a real loss. I always knew Marc was headed for great things,

What I liked most about this article was the conclusions. 

Oracle is acknowledging that Salesforce.com is moving upstream and becoming a threat and Ellison is sending a brushback pitch

Anyone who is familiar with Salesforce.com knows they are definitely moving upstream in a big way.  Saleforce.com is a true development platform already. It is already letting people realize the power of cloud computing.  I could go on for pages on where Salesforce.com is headed but would take this blog way off topic. Suffice to say Salesforce.com is headed upstream in a big way. 

Oracle is going to buy Salesforce.com. The smack talk can preclude a merger. After all, executives said the company is still shopping for deals.

There are so many great reasons why Oracle should buy Salesforce.com

The companies are very synergistic.

Salesforce could really benefit from Oracle dominant position in the enterprise as it moved forward with its development platform. With Oracle behind salesforce.com it would be so much easier to get major corporations to adopt a development platform for rolling out applications housed in the clouds using salesforce.com at its heart.
Oracle would have an incredible brand to build its cloud computing strategy built around an Oracle Software as a service offering.

What really got my attention what something I read in Silicon Valley Watcher. There article provided some really interesting insight….

Marc Benioff, CEO of Salesforce would make a good successor to replace 63 year old Larry Ellison, CEO of Oracle, when he retires says Matthew Greeley, CEO of BrightIdea.com. Mr Benioff is used to work at Oracle. When he left Oracle in 1999, Mr Ellison provided seed funding for Salesforce and also served on its board of directors.

-Mr Benioff needs a new challenge, he appears to be losing interest in Salesforce, or at least reducing his financial interest in his company at a rapid daily rate. He has been selling 10,000 Salesforce shares every single day since 21 August 2007. Before then, he sold 20,000 shares every day since 14 November 2006. Prior to that date, Mr Benioff sold thousands of shares every day in variable amounts since 31 July 2006.

[Please see: Insider Trades – Marc Benioff – Yahoo! Finance.]

-An Oracle acquisition of Salesforce would strengthen its strategic position against SAP, the top enterprise application software company. SAP has been slow in figuring out its online strategy, even naming its initiative has been challenging to the company.

UPDATED: Larry Ellison will have to buy Salesforce at some point anyway. Netsuite cannot be scaled to the size of Salesforce in this decade, maybe in the next. The two businesses could be easily integrated, that’s the beauty of online software, it’s all standards based.

To read the entire Silicon Valley Insider article….

Is Salesforce Worth $75/Share To Oracle?

Some things in this article really stood out…

Marc Benioff, CEO of Salesforce would make a good successor to replace 63 year old Larry Ellison

Mr Benioff needs a new challenge, he appears to be losing interest in Salesforce, or at least reducing his financial interest in his company at a rapid daily rate.

If Larry Ellison were willing to step down, I can not think of a better person to take over the helm at Oracle then Marc Benioff. Given where the industry is headed, cloud computing, Software as a service. Marc would be a visionary that could take Oracle to new heights. 

Posted Michael Corey,

Founder & CEO, Ntirety

www.ntirety.com

 

 

 

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