UPDATE 1-Software moguls Ellison and Benioff end feud, jump into deal

Thu Jun 27, 2013 7:01pm EDT

By Noel Randewich

SAN FRANCISCO, June 27 (Reuters) - Oracle Corp Chief Executive Larry Ellison and Salesforce.com CEO Marc Benioff publicly ended one of Silicon Valley's most bitter feuds on Thursday as they leapt into a major alliance aimed at selling more Internet-based software.

On a conference call to outline their new pact, the moguls, who in the past had been harsh critics of each other's businesses, said they plan to collaborate in the fast-growing area of cloud computing.

Their comments were a far cry from two years ago, when Ellison called Salesforce.com the "roach motel" of cloud-computing and Benioff ridiculed Oracle for selling "false cloud" products.

"Larry and I have worked together for, I think, 27 years since I first started at Oracle," Benioff told analysts and reporters.

Once a protege of Ellison, Benioff left an executive post at Oracle in 1999 to found Salesforce, one of the first companies to sell business software services over the Web.

"Hopefully it will be the end to us getting a little too revved up at times, but the vast majority of those 27 years have been epic," Benioff said.

Ellison said they would "try to continue to be entertaining while making sure that the entertainment never distracts from our commitment to working together."

Oracle is the world's No. 3 software maker but it has fallen behind emerging players like Salesforce.com in providing Web-based software, or cloud computing, a fast-growing trend that Ellison had been slow to tap into.

Ellison and Benioff's reconciliation is the latest example of how technology alliances can quickly shift as businesses evolve, turning friends into foes, and vice versa.

"By Larry and I coming together, a door has opened that lets us go through into the future, and we're not going to be held back by how the industry was," Benioff said.

In the new partnership, which was announced earlier this week, Oracle will integrate some of its cloud-based software programs with Salesforce products. Salesforce will also expand its own use of Oracle products and standardize Oracle products with its own offerings.

Their cooperation should help the two companies sell more cloud-based software.

Benioff formed Salesforce with the blessing of his former boss, who contributed $2 million in seed money. But they quickly became rivals after Oracle started selling software that competed with Salesforce products, and Benioff fired Ellison from his board of directors.

Oracle and longtime rival Microsoft Corp have also cozied up to each other, saying this week they would support each other's cloud platforms and increase sales opportunities. On Wednesday, Oracle announced a tie-up with cloud-company NetSuite, which is partly owned by Ellison.


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