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The Oracle-Salesforce deal, along with others, is good for end users

The witty jabs between Larry Ellison and Marc Benioff may be over, but overall the Oracle-Salesforce deal is probably good for users.

Mark Fontecchio
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Published: 01 Jul 2013

In the press conference last week, where CEOs Larry Ellison and Marc Benioff elaborated on the recently announced Oracle-Salesforce partnership, one IT journalist piped up with a question.

From his tone of voice, I think he was wearing the "sad clown" face.

The journalist asked if the nine-year deal between the two IT giants -- which encompasses everything from big iron to cloud apps -- means the end of jabs between the two.

You see, most IT journalists revel in public feuds like the years-long battle between Ellison and Benioff. It gives us something to tweet about. It takes our mind off duller (though more important) subjects such as server specs and application user interface upgrades.

But for enterprise end users, feuds usually aren't helpful. Most users run applications, middleware and hardware from a variety of vendors and would rather have all the pieces talk to each other nicely. You know the words: integration, interoperability. Whatever you call it, such cooperation becomes less likely when tech company leaders are telling the IT equivalent of "yo momma" jokes.

Take Ellison and Benioff. At one point, they each called the other's products a false cloud. On Thursday, however, their complimentary language for each other was downright flowery.

"It's really the best database company in the world," Benioff said.

"We're very proud of this new partnership with Salesforce.com and personally, I'm looking forward to working with Salesforce and Mark for years to come," Ellison added.

Most stories I've seen on the press conference focus on the Oracle-Salesforce rivalry dying, making fun of Ellison and Benioff being so friendly with each other now. A secondary focus has been on how the new deal will allow Oracle and Salesforce.com to sell more as partners than as pure competitors. But the most important result is how this affects users, and most likely it will affect them in a good way. One of the biggest infrastructure and database companies working together with the biggest cloud CRM company. There are plenty of customers out there running both who will be happy to see whatever fruits might come from the Oracle-Salesforce partnership.

Oracle looking to team up anywhere, everywhere

The Oracle-Salesforce deal is just one of several Oracle is making with giants in the IT industry, all in a move to get back to its roots. Oracle started as a database company, one where its database could run on anything, unlike competitors at the time, whose databases could only run on proprietary hardware.

First there was the announcement with Dell, a partnership that will see Dell bundle and resell Oracle database and applications on its own x86 servers. Some called the move confusing, saying that it doesn't make much sense for Oracle to be partnering with a hardware partner when it already sells its own hardware. The truth is more nuanced. Oracle has no interest in the x86, commodity server business. It has annihilated that part of its hardware division since acquiring Sun Microsystems, opting instead to focus on Sparc-based and "engineered" systems such as Exadata, in part because they have better profit margins.

But of course Oracle still wants to sell its other products -- database and software -- any and everywhere. Partnering with Dell gives the company the best of both worlds: It doesn't have to sell the low-margin commodity hardware, but can still profit from the high-margin database and software. Meanwhile, users running commodity Dell hardware can get Oracle products bundled in, which may make them easier to deploy.

Other partnership announcements have happened in the last week, one with Microsoft and the other with NetSuite. Those along with the Oracle-Salesforce partnership were very much about cloud computing, a sphere that Ellison has been quick to criticize in the past. Constellation Research analyst Ray Wang was spot-on when he said that Oracle has been a laggard in the cloud and "woke up and realized they weren't going to be relevant."

That said, let's not pretend Oracle isn't getting anything out of those deals. With the Microsoft partnership, Oracle gets its database into the Microsoft Windows Azure cloud, a curious development considering the fact that Microsoft has its own competing database in SQL Server. With the NetSuite deal, Oracle may be able to sell to more midsize companies, where it has sometimes struggled in the past.

In the end, the Oracle-Salesforce deal, as well as those with Microsoft and NetSuite, indicate that while Oracle isn't pushing too hard to become a public cloud provider, it does want to be the main provider of hardware and database infrastructure for those public cloud providers.

This might help them make more deals down the road with big enterprise customers, as you can imagine the following line from an Oracle salesperson: "Well, Salesforce.com runs on Oracle Database and Exadata. Why aren't you?"

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