Salesforce.com CEO Mark Benioff has become the newest addition to the enemies of Ellison list. Benioff had paid a million dollars for the right to offer a speech at OpenWorld but was told late in the day before his presentation that it was being cancelled. Apparently, Oracle CEO Larry Ellison was worried that Benioff’s message would contradict what he planned to say later in the day. If his goal was to silence Benioff, the cancellation had exactly the opposite effect. The incident has turned into an instant case history in how not to behave in the age of social media.

Benioff’s speech was going to focus on how good Salesforce.com had become at leveraging social media as an integral part of its cloud-based CRM service. It was scheduled for a theater that holds only a few hundred people and likely would not have been full.

Benioff simply rented a hotel room across the street and gave the presentation anyway – to a standing room only audience supplemented by over 7,000 people watching it live over the web. Over a hundred of his employees stood outside the hotel making a scene for the large number of media people covering the event and offering donuts to the 1,000 people standing in line to get in. His updated speech relentlessly made fun of Oracle (something he would not have done otherwise). He then made the compelling point that the social media his company was so good at made it possible to quickly organize this alternate event and make it far more impactful than it would otherwise have been.

Ellison made his scheduled speech in the afternoon. After a brief overview of the new Fusion Applications he announced the introduction of the Oracle Public Cloud. Ellison took every possible opportunity to contrast it with the approach to cloud computing that Salesforce.com, Amazon and others take. Ellison’s main point was that the Oracle approach to cloud computing used industry standard languages and interfaces, something that Salesforce.com and others do not do.

It is too early to know which approach to cloud computing will turn out to be the best one. I heard good points made by both Ellison and Benioff. Oracle’s decision to un-invite Benioff at the last minute only served to give Salesforce.com a far more effective platform on which to make its case. Ellison’s pit-bull approach to competition makes for good entertaining theater but actually reduces the effectiveness of the arguments he makes. He is rarely wrong on purely technical matters, but there is so much emotion tied up in decisions as to where to perform vital computing tasks that his selling style could undermine the strength of his arguments.

To me, the Oracle Public Cloud sounded like an updated form of application hosting – something that has been available from many vendors including IBM for quite some time. The degree to which Oracle has enhanced this model of computing was not obvious to me from the presentation. I am sure it will come out over time.

The decision to pick a fight over cloud computing overshadowed what I consider the big news that Fusion Applications are finally here – something I will cover in detail in future postings once I have a chance to digest all that I learned here and gather input from others.

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