Oracle, Salesforce and the nature of 'co-opetition'

Profile picture for user slauchlan By Stuart Lauchlan July 1, 2013
Summary:
We left the 'Week That Changed The Cloud' with niggling questions at the back of our minds about the new relationship between Oracle and Salesforce.com. This week some more clarity from the Oracle camp - and an glimpse into the nature of co-opetition.

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Regular readers will recall that last week we left the 'Week That Changed The Cloud' with more than a few niggling questions at the back of our minds in relation to the new alliance between Oracle and Salesforce.com.

Answers to some of those have now emerged in the form of a Q&A sheet for the analyst community from the Oracle camp. (We would assume that these are aligned with the Salesforce.com version of the same?)

Some questions remain unclear. For example, Salesforce.com has committed to adopting Oracle's Exadata machines which left the question hanging as to whether this meant an end to its use of Dell commodity servers.

This question goes unanswered by Oracle. (In fairness, it's a matter for Salesforce.com to disclose.) Oracle states:

What we can say is that [Salesforce.com] is relying on older generation X86 servers from other hardware vendors to run its database and middle-tiers, and not on existing Oracle/Sun systems. We do not have any information that we can share about the number of systems that will be replaced.

But overall the answers provide some additional clarity and  an interesting glimpse into the nature of how 'co-opetition' is going to work  - complete with one or two digs at Oracle's new BFF en route.

There's also confirmation - as if we needed it - that Oracle sees Workday as the real loser in all this.

Customer clouds

Asked what the new alliance means for Oracle CX Cloud in deals where it competes directly with Salesforce.com, the answer is:

zero impact on our Oracle Customer Experience Cloud strategy or offerings, including our Sales Cloud, Marketing Cloud, Social Cloud, Commerce Cloud, and Service Cloud. There is zero impact on our on-premise strategy or offerings, including Oracle Siebel, Fusion Sales, and ATG Commerce.

Oracle has no plans to offer SFDC SFA on the Oracle Public Cloud. This partnership represents co- opetition where Oracle and SFDC will continue to compete in this market segment and Oracle will continue to focus on winning market share.

And a lingering hint of old competitive habits:

Oracle CX Cloud components are already seamlessly integrated. SFDC’s cloud story is not.

Release 7 of Oracle Sales Cloud is the strongest release to date and surpasses SFDC SFA in both usability and functionality.

When asked how this alliance will help improve Oracle's overall go-to-market position for Applications, there are seeming downsides for Salesforce.com:

This announcement leverages our primary competitor to reinforce the message that Oracle is a leader in cloud applications and services. Salesforce.com will implement Oracle HCM Cloud and Oracle ERP Cloud internally.

Salesforce.com can no longer put forth the claim that Oracle is a non- cloud player.

Furthermore, there is no doubt that Oracle will become the leading provider of incentive compensation and territory management functionality into the Salesforce.com customer base.

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But it's Workday that's clearly in the line of fire according to Oracle's positioning:

This agreement is also a forceful strike against Workday. It unsettles Workday's strategy of going to market as a favored SFDC partner. It also drives a wedge into the Workday/SFDC alliance to deliver services on force.com.

The same point is made again when asked if Salesforce.com plans to use Oracle HCM Cloud and Oracle ERP Cloud internally:

Yes—Salesforce.com plans to use Oracle HCM Cloud and Oracle ERP Cloud software internally.

Again, this agreement is a forceful strike against Workday. It unsettles Workday's strategy of going to market as a favored SFDC partner.

It also drives a wedge into the Workday/SFDC alliance to deliver services on force.com.

Who's using SFDC?

Now to a trickier one - does Oracle plan to use Salesforce.com internally?

This seemed to confuse a lot of people after the Larry Ellison/Marc Benioff call last week when the former declared 'Oracle will be a user of SFDC applications'. That begged the question of where that left Oracle's own CRM and SFA offerings?

The devil is in the detail of course.

The top-line answer:

Oracle does not intend to use any Salesforce.com solutions within Oracle.

So what did Larry mean? He meant:

Oracle will continue to support interoperability between Oracle applications and SFDC applications for joint customers. Specifically, Oracle will continue to support interoperability of SFDC applications such as SFA and Chatter with Oracle Marketing Cloud for customers who run both Clouds.

Oracle does not intend to force Oracle Marketing Cloud customers to switch from their current use of SFDC applications to Oracle Customer Experience Cloud and Oracle Social Network.

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But there will be change on one front:

At the time of the Eloqua acquisition, Eloqua had SFDC SFA deployed to its sales organization. Oracle will continue this isolated use of SFDC SFA for the Oracle Eloqua sales organization only through the end of calendar 2013.

This will allow for the test case/quality assurance of the integration into Oracle's own internal deployment of Oracle Sales, Oracle Service, Oracle Marketing, Oracle Commerce (ATG), Oracle Social (OSN), Oracle Global HR, Oracle Talent Management, and Oracle ERP.

Oracle’s Eloqua sales organization will move to the Oracle Sales Cloud (Fusion) in early 2014.

Verdict

Quite a bit clearer now on a number of points.

Still not clear if it's a nine (press release) or a twelve year (Benioff)  deal though...

 

Disclosure: at time of writing, Oracle, Salesforce.com and Workday are Premium Partners of diginomica.