Oracle & Salesforce.com: Exciting alliance or PR smokescreen?

Over a week later and the industry analysts are still puzzling over the Oracle/Salesforce.com love-in that will see the two rivals become BFFs. 

This week two very different views on the alliance were published. The first, from Pierre Audoin Consultants (PAC), sees the tie-up as "intriguing" while the second, from Ovum, sees it as largely PR vapourware. 

For PAC, Philip Carnelley argues: "Anyone who thought that Oracle was still diffident about Cloud, seeing its cloud strategy as subservient to its desire to sell big datacentre systems based on its Exa-boxes, will have to modify their views. Oracle is striving to take the high ground by becoming the default platform to power the Cloud."

He argues that the Salesforce.com alliance - along with deals forged with NetSuite and Microsoft at the same time - all fundamentally come back to shoring up Oracle's database leadership position. 

"Our take is that Oracle would rather sacrifice some potential applications sales to Salesforce or Netsuite if that means it raises the chances of selling in its Financials and HCM apps atop its database platform," he suggests.

But for Salesforce, it's a straight win, Carnelley adds. "Although sacrificing its potential to move off Oracle as its core platform (which would have been tough to do anyhow), it has no doubt gained a better licensing deal," he reasons. 

"Much more important, Salesforce has dramatically reduced its competitive challenges in the market, as Oracle is now committed to support, though not to actually sell, Salesforce in the front office linked to Oracle (Fusion) apps in the back office – HCM and Financials were the two mentioned on the announcement press call."

He concludes: "Oracle is ceding a little ground in the market today, in competitive terms, to reinforce its longer-term strategic play. The remaining question for us is uncertainty around the positioning of its own Fusion CRM offering, which noticeably was never mentioned on the press call.

"Our belief is that Fusion CRM will still be offered as part of a suite, as an alternate choice to Salesforce, but if the Salesforce/Oracle promise of true interoperability between their offerings can be met, the momentum behind Fusion CRM, even as a Siebel upgrade, will be low."

Less to this than meets the eye 

Over at Ovum, Carter Lusher is far less convinced, arguing that there's less to this than meets the eye.  "Nothing in the announcement amounted to a significant change in either company’s strategy," he posits. "Instead, what was offered was only just above “press release-ware” level, because no proof points were provided. 

"In addition, the cross-vendor application integrations, Salesforce’s commitment to Oracle technology such as Database 12c, and internal usage of each other’s applications, are not unique or surprising. It is Ovum’s opinion that this announcement neither shifts the dynamics of the IT industry nor should it change any IT organisation’s IT strategy or procurement plans."

Lusher goes on to list questions that he feels have not been answered by either Oracle or Salesforce.com, including: 

He concludes that IT and CRM decision-makers take a 'business as usual' stance on the new alliance. 

"There is nothing in this Oracle-Salesforce announcement that would indicate a shift in the marketplace for enterprise applications or data centre hardware," states Lusher. "Even using Salesforce as a 'referenceable customer' for Database 12c and Exadata should be taken with a grain of salt. 

"This is because of Salesforce’s unique technical environment and business model, the tie-in with Oracle for marketing, and unknown pricing and other concessions that Oracle made to Salesforce, which would not be available to the average enterprise or public sector organisation."