Benioff plays nice with Oracle at OpenWorld

Marc Benioff, who invested heavily in a booth and an appearance at Oracle's OpenWorld, claimed companies can deploy Oracle and Salesforce.com together.

SAN FRANCISCO -- Salesforce.com's brash CEO Marc Benioff took a softer approach to a key competitor as he took

the stage yesterday at Oracle's annual user conference.

Attendees lined up around the block in a torrential downpour that soaked San Francisco for most yesterday to hear Benioff speak on cloud computing -- and for a chance at one of the 500 free flip cams Salesforce.com was giving away as part of the event.

"We asked for clouds at OpenWorld but this is way beyond our expectations," Benioff said to a rain-soaked audience.

But where in the past Benioff directly challenged competitors like Siebel (which Oracle now owns) with signage, pointed barbs and promotions aimed at its user base, yesterday he expressed gratitude to Oracle, where he had once worked for 13 years.

"I want to thank Oracle," Benioff said. "I thought it was fantastic (that) they let us come here."

Benioff's presentation, entitled "The Best of Both Worlds," featured no new announcements, and familiar arguments for the benefits of cloud computing. Software as a Service (SaaS) is faster to deploy, easier to manage and more cost efficient.

Salesforce.com, Benioff said, is stable; Salesforce.com delivered five 9s of uptime last year; scalable, Japan Post went from zero users to 100,000 users; and secure, Salesforce.com has customers coming in every day to review its security.

"Very few companies have access to as many security teams as we do to make sure security is top of the game," he said.

Additionally, cloud computing provides economies of scale for users.

"The power of cloud computing is the democratization of technology allowing everyone the same access to the same code, the same functionality," Benioff said. Salesforce.com's three data centers, which serve 63,000 customers, have less than 1,500 Dell servers in each of them.

"If they were not on Salesforce.com, how much software and hardware would those 63,000 customers have to acquire," he said. "These shared servers give us the opportunity to be a much more efficient industry where we can push that savings on to you."

Benioff brought Michael Dell himself, CEO of Dell, onto the stage to share the message of running both Salesforce.com and Oracle. EMC CIO Sanjay Mirchandani also appeared to back the concept.

While Benioff resisted any temptation to fire back at his former boss Larry Ellison, who in an address to the Churchill Club last month, called cloud computing "water vapor" and last week called Salesforce.com an "itty bitty" little application, he did make clear that customers, like EMC, are able to run Salesforce.com on-demand and Oracle CRM on-premise.

"The point of our being at the show is a lot of customers that use the Oracle products -- Oracle database, Oracle financials -- companies like us that have an Oracle system can find benefits in cloud computing in rapid application deployments. The synergy is in being able to run systems yourself, but also add cloud computing systems that add value."

That strayed from Benioff and Salesforce.com's earlier marketing message promoting the end of software.

Additionally, there was no mention of Oracle CRM On Demand, Oracle's own SaaS-based CRM product.

"The fact that he's here says a lot," said Sheryl Kingstone, research director with the Boston-based Yankee Group. "The fact that everyone is inviting him to the show floor says something about open communities. It's a direct hit at Oracle On Demand."

An Oracle CRM executive questioned about Benioff's appearance at the show declined to comment.

Salesforce.com spent significantly to appear at Oracle, beyond the presentation with the Flip camera giveaway. It also has a large exhibit on the show floor and is giving away a Mini Cooper car a day.

Given the investment and the stage, Salesforce.com elected to show off its new Service Cloud 2, its customer service application that integrates a call center agent desktop application with social communities like Twitter and Facebook and allows agents to populate the corporate knowledge base with customer comments, advice and a new question and answer capability.

"The Service Cloud 2 is good but still has some questions," said Paul Greenberg, president of the Manassas, Va.-based 56 Group LLC. "They showed Facebook and Twitter integration which is not uncommon, though the quality seems good. I really would have liked to see how it integrates with communities. I don't see it from a service standpoint. I still was impressed with what I did see."

Benioff also argued the importance of a multi-tenant environment to cloud computing, something Oracle CRM On Demand executives have criticized in the past, noting they offer multi-tenant and single tenant options.

Yet, Salesforce.com's appearance does not mean Oracle is giving up on On Demand, Kingstone insisted.

"They're very different communities when push comes to shove," she said. "Organizations with transactional and some on-demand CRM needs will be pushed to Siebel and CRM On Demand. It does not downplay the strategic direction of Oracle On Demand."

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