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Enterprise Software

Salesforce Teams with Old Rival Oracle in the Cloud

Salesforce Teams with Old Rival Oracle in the Cloud
June 26, 2013 3:24PM

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"Companies no longer have the luxury of a black-and-white, non-competitive relationship with another company," said analyst Brad Shimmin. "Certainly, Oracle and Salesforce share a number of similar goals that put them at competitive odds...but at the same time they also find themselves in need of one another to better reach the markets that they are targeting."

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Oracle is on a partnership roll. In the same week the database giant agreed to an enterprise cloud computing alliance with Microsoft, the company has signed a comprehensive, nine-year partnership with rival Salesforce.com, spanning all three tiers of cloud computing: applications, platform and infrastructure.

Under the terms of the partnership, Salesforce.com will standardize on the Oracle Linux operating system, Exadata-engineered systems, the Oracle Database and Java Middleware Platform.

"Larry [Ellison] and I both agree that Salesforce.com and Oracle need to integrate our clouds," said Marc Benioff, Salesforce chairman and CEO. Benioff said Salesforce.com's Customer Relationship Management solution integrated with Oracle's Fusion Human Capital Management and Financial Cloud "is the best of both worlds: the simplicity of Salesforce.com combined with the power of Oracle."

Driving Efficiency

For its part, Oracle plans to integrate Salesforce.com with Oracle's Fusion HCM and Financial Cloud, and provide the core technology to power Salesforce.com's applications and platform. Salesforce.com will also implement Oracle's Fusion HCM and Financial Cloud applications throughout the company.

"When customers choose cloud applications they expect rapid low-cost implementations; they also expect application integrations to work right out of the box -- even when the applications are from different vendors," said Larry Ellison, CEO at Oracle. "That's why Marc and I believe it's important that our two companies work together to make it happen, and integrate the Salesforce.com and Oracle Clouds."

With more than 1 million complex transactions delivered every day, Parker Harris, co-founder and executive vice president at Salesforce.com, said that an Oracle and Exadata infrastructure will make Salesforce.com a more efficient company -- and customers will benefit.

"Deploying Exadata-engineered systems throughout our data centers will allow us to significantly lower overall hardware, floor space and energy costs, while simultaneously providing our customers with higher performance and better reliability," he added.

Strange Bedfellows

To get feedback on Oracle's latest strategic alliance in the cloud, we turned to Brad Shimmin, a principal analyst at Current Analysis. He asked us a question many people are probably asking: Have you ever seen stranger bedfellows? He told us it's a sign of the times.

"Companies no longer have the luxury of a black-and-white, non-competitive relationship with another company. They quite often find themselves needing to compete with their partners in one facet of the industry or another," Shimmin said. "Certainly, Oracle and Salesforce share a number of similar goals that put them at competitive odds, such as CRM, sales enablement and other line-of-business applications, but at the same time they also find themselves in need of one another to better reach the markets that they are targeting."

Shimmin said partnerships like this one remind us that the market dynamic is indeed dynamic. Companies that don't adapt perish. Companies that are not willing or able to move from one stated direction to another are doomed to failure.

"This partnership highlights two companies that are willing to respond to market demands, whereas just a year or two ago it would have been entirely unthinkable," Shimmin said. "It's good for the industry."

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