Benioff Vs. Ellison: Tech TKO?

By Tony Kontzer

In a compelling battle of one-upmanship at Oracle's OpenWorld conference in San Francisco, which wrapped on Oct. 6, Salesfore.com CEO Marc Benioff scored a decisive technical knockout over his mentor and rival, Oracle CEO Larry Ellison.

The real fireworks unfolded Wednesday, Oct. 5, a day that started with the news that Ellison had "postponed" Benioff's scheduled keynote that morning--a slot for which Benioff said he'd paid $1 million--rescheduling it for early Thursday, after all the other keynotes had passed and most attendees had returned home. Naturally, Benioff declined, instead choosing to proceed on his own, as scheduled, at a restaurant across the street from the Moscone Center, site of OpenWorld.

When I arrived at the restaurant Wednesday morning, Benioff had managed to create a chaotic scene, with hopeful attendees lined out the door and down the block, and a gaggle of Saleforce employees picketing the street with signs emblazoned with Benioff's face and the words "Too innovative for #OOW11" (the last part being the Twitter hashtag for OpenWorld).

Once he started speaking, Benioff let his rival have it, starting by declaring that OpenWorld's focus had been on a "next-generation mainframe computer," a clear admonishment from a man whose cloud computing mantra is that companies should no longer take on the burden of buying and maintaining software and hardware themselves.

Benioff suggested that the rug was pulled out from under his keynote to prevent that message from raining on what he's taken to calling Ellison's "false cloud," and that snuffing out contrarian views wasn't a sound business decision. "Nobody would have paid attention to what I had to say today. He should have ignored me," Benioff said. "You can cancel my keynote, but you can't stop innovation."

Yet, when pressed on the topic during a follow-up session with media, Benioff admitted that he was partly to blame, and that the cancellation might have stemmed from a post on his Facebook page suggesting that Ellison's opening keynote on Sunday had "set a low bar." No surprise that Ellison ultimately had a decisive reaction to that. (Benioff also said that this would probably be his last appearance at OpenWorld because Salesforce has outgrown the need to invest in that marketing platform.)

As if cancelling Benioff's keynote hadn't drawn enough attention, Ellison--Silicon Valley's reigning king of the witty cutting remark--took the bait, making Salesforce.com the focus of his ire during his closing keynote Wednesday afternoon. After declaring that Oracle's suite of Fusion applications were finally available after six years of development, and then introducing an Oracle public cloud and social networking application--"me, too" announcements that appear to be reactions to Salesforce's mushrooming success--Ellison let loose, asserting that applications built with Salesforce's Apex programming language won't run anyplace else.

"The Salesforce.com cloud is kinda sticky. It's the ultimate vendor lock-in. You can check in but you can't check out," said Ellison. "I like to think of it as the roach motel of clouds."

Regardless of which approach to IT you subscribe to, you have to admit, that's pretty funny.

In the end, both executives were really exchanging what amounted to a lot of hot air. After all, the two men, and their companies, operate in different paradigms. Oracle has nearly 400,000 installed customers to consider--all of whom have made significant investments in Oracle technology. Ellison & Co. are not about to abandon the technology stack they've assembled. Meanwhile, Salesforce appeals to a whole new breed of customers that are invested in obtaining IT as a service, and they're not about to run off and buy a bunch of Oracle's Exadata database machines.

The two companies might eventually start trading cloud customers back and forth, but Oracle's got some catching up to do before that happens. Until then, we should all just sit back and enjoy the show.