Oracle's Ellison,'s Benioff Trade Barbs on Cloud Computing Vision

Oracle CEO Larry Ellison and CEO Marc Benioff used the Oracle OpenWorld show as the venue to question each other's credentials as leaders in the cloud computing movement.

SAN FRANCISCO - Oracle CEO Larry Ellison and CEO Marc Benioff have exchanged highly public barbs at the Oracle OpenWorld show the week of Sept. 19 about which company can deliver products and services that adhere to a true vision of what cloud computing is all about.

Speaking at the welcoming keynote Sept. 21 for his company's OpenWorld show here, Ellison told attendees that's widely used CRM (customer relationship management) software is "basically just a sales force automation app on the cloud." Ellison noted that "some people say that's cloud computing. But it's not cloud computing, it's SAAS [software as a service]. There's a big difference." Furthermore, said Ellison,'s products are SAAS apps running on a "very limited platform."

That Ellison would launch a competitive diatribe against is not surprising. At the show on Sept. 19 the company introduced the Oracle Exalogic "cloud in a box" system that would allow customers to implement self-contained cloud environments with hardware from its recently acquired Sun subsidiary and the highly integrated Oracle software stack of database, middleware and applications.

But it marks the first time that Ellison has voiced such a direct public competitive attack against, which was founded by Benioff, who was a rapidly rising executive at Oracle for 12 years. Benioff has often described Ellison as his personal mentor at Oracle who gave him the advice and inspiration to go found his own company. In fact, Ellison was one of the earliest investors in when Benioff left Oracle to start up the SAAS CRM software company.

Prior to this year's show, Oracle had never heavily promoted itself as a "cloud computing company" other than to note that it had substantial cloud computing assets in its software technology "stack."

On the contrary, Oracle adhered to the view that client/server software applications installed in centralized corporate data centers would continue to be the primary way that businesses delivered access to computing resources.

But now that the company is marketing server and storage hardware acquired from its Sun Microsystems buyout, Ellison is now presenting Oracle as a soup-to-nuts IT systems, software and services company that's ready to be a major player in cloud computing.

Ellison used his first Oracle OpenWorld keynote to suggest that and companies like it can't make valid claims to be leaders in cloud computing. According to Ellison, a better example of what cloud computing is all about is Amazon's EC2, which Ellison described as a "hardware and software platform for building and running applications" that is built on Linux, Java, Oracle Database and the MySQL open-source database.

On the Amazon platform, "everything is virtualized so each customer has his own separate, secure and virtual environment with fault isolation, so most systems failures affect only one customer," Ellison said.

Ellison claimed that is not a virtualized environment, "in fact, it's just the opposite. With, hundreds of thousands of customers have to commingle their data to use these applications, so GE's data is in there mixed up right next to Siemens' data and so on-and the result is that really it is a very weak security model."

On Sept. 22, Benioff came to the Yerba Buena Center for the Arts auditorium next door to the Oracle OpenWorld venue at Moscone Center to announce the introduction of Chatter 2, the next version of its's Facebook-like Chatter collaboration platform.

Benioff thanked Ellison for bringing attention to's presence at Oracle OpenWorld. Without this attention "we would be nobody here" among all the other Oracle-focused presentations and exhibits, he said. "We are coming in peace," Benioff said. "We are the cloud people and because we are the cloud people we are peaceful people," he said.

But then Benioff launched into his own diatribe to say that Oracle can't claim to be a cloud computing company by telling customers that they need to buy one of Oracle's "ceiling high" Exalogic server boxes to set up a cloud computing environment. Such claims amount to a "false cloud" and Benioff warned his listeners to "beware of the false cloud, because the false cloud is not efficient, it is not democratic and it is not economical" because it doesn't allow any business to access cloud resources as needed.

Instead, enterprises are be able to just go to the Internet to acquire whatever cloud computing capacity and applications that they need whether they need resources for one worker or 10,000 without having to buy an expensive high-capacity server box like the Exologic server, Benioff said.

Benioff suggested Ellison's comments amounted to a last-minute change in his Sept. 19 presentation when he decided he had to make a stronger cloud computing pitch to kick off the show. Benioff noted that besides Ellison's keynote, the cloud computing theme was not prominent at OpenWorld's Moscone Center venue here. One would have expected to see the cloud theme in Oracle displays and presentations throughout the show, he said.

Denis Pombriant, principal analyst with the Beagle Research Group, which tracks the cloud computing market, said the exchange between the two CEOs was really much ado about nothing. "They are really two sides of the same coin" in their approaches to cloud computing, Pombriant said. They are just addressing the market with different sets of products and strategies, but both are valid, he said. "It reminds me of that old television commercial for low-calorie beer - -Tastes Great - Less Filling,' " said Pombriant.

However Pombriant suggested that Ellison missed an opportunity in his keynote to provide more facts and figures on how Oracle's new combined hardware-software strategy will make it a leading force in the cloud computing field.

Pombriant also rejected Ellison's assertion that the cloud environment was not virtualized or secure. After more than a decade as a leading SAAS application provider to many of the largest enterprises in the world, "has proven beyond a shadow of a doubt" that its service is "scalable and secure."

Chris Preimesberger contributed to this news story.

John Pallatto

John Pallatto

John Pallatto has been editor in chief of QuinStreet Inc.'s since October 2012. He has more than 40 years of experience as a professional journalist working at a daily newspaper and...