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Oracle vs. salesforce.com: When Worlds Collide

Posted By David Brousell, October 05, 2011 at 4:30 PM, in Category: Transformative Technologies

To hear Marc Benioff, the co-founder and CEO of salesforce.com tell it, Oracle cancelled his planned keynote address at its annual OpenWorld customer and partner conference last night because of a negative comment he made on Facebook about Oracle CEO Larry Ellison's speech on Sunday night.

At a hastily arranged talk this morning at the St. Regis hotel, directly across the street from OpenWorld, where placard-bearing demonstrators were trying to draw attention to the controversy, Benioff said he criticized Ellison for having set a "new, low bar" in keynote speeches.

"I apologized and sent him a note," said Benioff, who once worked at Oracle and counts Ellison as one of salesforce.com's investors. "It's not personal."

It may not be, but the dispute between the two companies and their CEOs reveals radically different views about the direction of information technology in general and the effect specific trends such as mobility, cloud computing, socialization and collaboration will have on the ability of organizations to succeed in the future.

Benioff believes that we are in a state of social revolution, exemplified, on one level, by Twitter, Facebook and other forms of social technologies and media, and manifested on another far more profound level by the recent uprisings in the Middle East and even the protests on Wall Street.

He's critical of Oracle's vision of "engineered" hardware and software systems -- a vertically integrated approach spanning microprocessors, hardware systems, database and applications -- saying it is a throwback to a time long past.

"You can cancel keynotes, but you can't stop innovation," Benioff said. "The message of their show (OpenWorld) is proprietary hardware and software is the future. It is not open. It is not democratic. It is a false cloud. The hypnosis that the future is a new mainframe is wrong." According to Benioff, open requires three things: an application's logic has to be portable, data must be portable and the application should have open application programming interfaces.

This afternoon at another keynote, Ellison continued the war of words. He said that everything in Oracle's public cloud runs in other clouds such as Amazon's as long as they are standards-based, which he claimed salesforce's is not.

"The salesforce.com cloud is kind of sticky," Ellison said. "It is vendor lock-in. It is the roach motel of clouds. You check in, but you can't check out."

For Benioff, the future is in creating what he calls the "social enterprise". Organizations will conduct business differently as social enterprises, relying more on flatter organizational structures, collaboration technologies and the collective energy of individuals to speed the pace of business and delight customers in new ways. "We're selling a new way of doing business," he said. Moreover, he believes that the social revolution holds the key to growth and jobs creation. "We need to recreate the manufacturing industry," he said. He told me that he gave this message directly to President Obama recently.

Corporate chief executives need to get the message about the social revolution, too, he said. "CEOs need to understand something. You may think you have command and control, but there's always a way around it. You have to create the social enterprise. If you don't do that, I don't know what your business model is in 5 years."

It's hard to say what will be in 5 years, but when it comes to cloud computing, social media and even "engineered systems", there's little doubt that there will be many philosophies and approaches to delivering capabilities to users and organizations. And that's a good thing. Today's Oracle versus salesforce argument may make for good theatre but it actually leads to better understanding in the end.

The high tech industry is indeed new again.

Written by David Brousell

Global Vice President, General Manager and Editorial Director of the Manufacturing Leadership Council


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