Original URL: http://www.theregister.co.uk/2013/06/25/salesforce_oracle_partner_analysis/

Salesforce and Oracle forge partnership to smash rivals

'False cloud' floats into 'roach motel'

By Jack Clark

Posted in Cloud, 25th June 2013 22:55 GMT

Analysis The notoriously shy and unassuming CEOs of Oracle and Salesforce have announced a major partnership after spending years throwing clods of muck at one another – leading many to ask what is going on in the IT industry to cause this change.

News of the broad alliance between Salesforce and Oracle was announced on Tuesday, and will see Salesforce consume Oracle's software and hardware, as predicted by El Reg, and Oracle integrate Salesforce.com with its own human capital management apps.

Perhaps we should call this unification Salacle, or Oraforce? Knowing which company name to put first is difficult, given the titanic egos at play.

The nine-year agreement guarantees Oracle a major customer, and gives Salesforce greater selling opportunities within Oracle environments – crucial, given Oracle's commitment to growing its share of this market.

It comes as something of a surprise, given Larry Ellison's classification of Salesforce's cloud as a "roach motel" in October 2011, and Salesforce chief Marc Benioff's labeling of Oracle's on-premise tech as a "false cloud" in 2010. Manufactured controversy is a great way to stay relevant in an era defined by nimbler, smaller competitors, it seems.

Workday appears to be in a risky position given the alliance, as the combined Oracle and Salesforce offerings threaten its integrated suite of human cattle capital management systems.

It also highlights how Oracle has been forced to partner to retain relevance in a fast-moving cloudy world, and this announcement stacks on top of Oracle coming into Azure via a Microsoft tie-in, and the blessing of Dell as the company's preferred x86 box slinger.

The alliance comes after a series of limp quarters for Oracle, during which the database giant has seen revenues in its much talked-up hardware division shrink. It has also had trouble signing up new licensees for its pricy Fusion cloud apps, and has instead been growing money through increases to existing agreements.

Looked at dispassionately, it seems Oracle is squeezing its current customers for additional revenue, and having a hard time getting new people to dabble in its big red stack.

The alliance also raises questions about Salesforce's use of open source database PostgreSQL which sits inside the company's database platform. Salesforce announced late last year that it plans to hire "40-50 people next year for a huge PostgreSQL project @ Salesforce" – which seems to us to jar with Salesforce's all-in adoption of Oracle technologies.

"Whatever the relationship between the Oracle cloud thing and their work on Postgres is, they haven't stopped their public support of Postgres," Josh Berkus, a core team member on the PostgreSQL project, told The Register on Tuesday. "They are continuing to hire PostgreSQL engineers."

Though the Oracle statement said Salesforce would be running its main services on Oracle hardware and software, no mention was made of Heroku – a platform cloud that Salesforce owns and which runs exclusively on Amazon Web Services's mega infrastructure cloud. ®