Here's Why Marc Benioff Agreed To Make Friends With Larry Ellison Again
Business Insider/Julie Bort
We now know that Benioff is getting three big things out of the deal:
1. It'll cut Salesforce.com database server costs "in half," Benioff said on the call.
2. Salesforce.com and Oracle apps will be knit together. This could give Salesforce.com an "in" with Oracle customers. "You press a button and suddenly that integration gets loaded and the apps start sharing data and work together," is how Ellison described it.
3. Oracle has agreed to be a Salesforce.com customer, at least as far as acquisitions are concerned. "Virtually every time we buy a company, they are running Salesforce.com's CRM," Ellison explained. "In the old days, we would slide them onto our Fusion salesforce app right away. Now, we'll leave some of those companies on Salesforce.com."
The deal was formally announced yesterday after Ellison spilled some of the beans about it during his quarterly conference call with analysts last week. Oracle was reporting a rare consecutive miss on revenue and Ellison wanted to show the analysts that big deals were in the pipeline.
It's easy to see what Oracle is getting. Salesforce has agreed to buy a whole bunch of Oracle technology, including Oracle's new cloud database known as Oracle 12c; Oracle's Exadata hardware that runs the database; and Oracle's flavor of Linux (which means Salesforce is abandoning Red Hat).
The deal is supposed to run for at least nine years, although Benioff said on today's conference call that it would last 12 years.
At one point, an estimated deal value of about $300 million was bandied about by JMP securities analyst Pat Walravens. (We've contacted Walravens and asked him if he he still thinks the deal is worth this much.)
The deal also means Benioff won't be cutting his database costs by ditching Oracle for a free and open-source database called PostgreSQL. It looked like Salesforce was moving that way last year, when it revealed plans to hire an army of PostgreSQL developers last year.
- I spent $2,000 for 7 nights in a 179-square-foot room on one of the world's largest cruise ships. Take a look inside my cabin.
- Colon cancer rates are rising in young people. If you have two symptoms you should get a colonoscopy, a GI oncologist says.
- Saudi Arabia wants China to help fund its struggling $500 billion Neom megaproject. Investors may not be too excited.
- Catan adds climate change to the latest edition of the world-famous board game
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- Tired of blatant misinformation in the media? This video game can help you and your family fight fake news!
- JNK India IPO allotment – How to check allotment, GMP, listing date and more
- Indian Army unveils selfie point at Hombotingla Pass ahead of 25th anniversary of Kargil Vijay Diwas
- JNK India IPO allotment date
- JioCinema New Plans
- Realme Narzo 70 Launched
- Apple Let Loose event
- Elon Musk Apology
- RIL cash flows
- Charlie Munger
- Feedbank IPO allotment
- Tata IPO allotment
- Most generous retirement plans
- Broadcom lays off
- Cibil Score vs Cibil Report
- Birla and Bajaj in top Richest
- Nestle Sept 2023 report
- India Equity Market