Yikes! Is Oracle Reeling In Salesforce And NetSuite?

The Manchurian Candidate Goes Silicon Valley

[Updated 6-30-2013 after having a little time to digest this week’s overload of Oracle deals and read/listen to many other perspectives.  Whatever else may have been said by those much smarter and more in the loop than I am, it remains very clear that everyone involved in these deals is trying to shore up their own weaknesses without giving away the store and that, where NetSuite , Salesforce and their CEOs are concerned, the ties that bind them to Mr. Ellison and Oracle have always been and continue to be VERY substantial.]

After two intense days, a real geekfest with clients, and then catching up on the info tech happenings so far this week, I’m exhausted.  Yes, we’re all buried in Oracle announcements, and it’s astonishing how wild is some of the coverage.

Oracle’s partnering with Microsoft is interesting (you’ll have to check out the relevant press releases, news conferences, etc. for yourselves as I’m racing to get this up and so skimping on the citations), but it has only moderate relevance to our neighborhood at the intersection of HRM and IT unless you’re an HR tech vendor making technology stack and/or cloud deployment choices.

[6-30-2013 — And if you are such a vendor, be very afraid of all these folks (Microsoft, Oracle, Salesforce and NetSuite) because they are in bed with Oracle’s Fusion HCM applications.  Oracle wants to co-opt you as a partner or put you out of business, if not immediately then over time, across the middle to larger to global enterprise markets, public and private sector.  Yes, although there’s so much going on here that has nothing to do with our little corner of the IT world, but this is a huge power play from a leader whose philosophy is domination.]

But Oracle partnering with Salesforce and further with NetSuite, and putting Fusion HCM front and center in both announcements, now that’s something that really catches our attention.  So I’ve been reading the coverage, checking the jungle drums and actually contemplating all of this while trying to plan trips to Israel and India.

Across the coverage, here’s some of the livelier possibilities (summarized in my own words with a few opinions but definitely inspired by what I’ve read) that have been suggested:

• Has Salesforce thrown their ecosystem partners under the bus, and not just the obvious Workday, but also such vendors as Vana and Cornerstone OnDemand?  [6-30-2013 — I do think that anyone who has built HR-related products on the Force.com platform, except for the lowest end of the market, will now be up directly against the Oracle Fusion HCM marketing and sales machine.  I also think that Force.com will not be re-architected to add the effective-dating, effective-dated metadata framework, systemic applicability and a number of other InFullBloom architectural behaviors, for which some of their partners might have been hoping, in favor of encouraging use of the Oracle technology stack and development environment.]
• Has Salesforce effectively said that their own development platform, to which some very good in-house folks and an entire ecosystem of development partners have committed their careers, is no where near as good as what Oracle can give them?  [6-30-2013 — see above.]
• Could this really be about Oracle taking over Salesforce as well as NetSuite (eventually — let’s not run afoul of regulatory or market queasiness on such a deal), meanwhile playing off against each other the putative hopes of those two CEOs of becoming Larry’s successor (with Larry laughing all the way into the richest of rich retirements)?  [6-30-2013 — There are many ways to influence the competitive behavior of nominally independent partners, and it’s fair to say that Mr. Ellison’s “influence” over NetSuite has ensured, to this point, minimal direct competition between the firms and no badmouthing.  I think we can now be confident that Salesforce will be influenced to “do no harm” to Oracle, which is going to be very difficult indeed.  Every Workday deal, with Salesforce at least a mute reference as long as they’re running on it, does Oracle harm.  Even worse, how does Salesforce continue to push their differentiators when their new best friend represents everything against which they’ve been differentiating.  My guess is that Mr. Benioff will be under tremendous pressure to limit Workday’s footprint at Salesforce and, over time, to reduce it in favor of Fusion HCM applications.  As to whether either or both firms eventually will be acquired, I think the answer is yes, but having an opinion on this is really above my pay grade.]
• Is this more about the usual infrastructure plays and much less about PaaS and applications?  [6-30-2013 — I’m increasingly of the opinion, again above my pay grade, that the answer is a resounding yes.  If the momentum toward non-SQL, non-Oracle, non-relational databases, propelled by their use in enterprise and consumer applications, were to continue, this is NOT good for Oracle’s historical competitive center, the so-called Red Stack.  With these deals, Oracle moves to become a much more visible creator of Red Stack clouds, and that’s where the IT spending growth will be as in-house data centers continue to shrink at all but the very largest organizations.]
• Is this really about Oracle’s fear of Workday and/or SAP and a mega-effort to cut them off at the pass?  [6-30-2013 — There are much bigger fish to fry here vis a vis Oracle’s play to be/remain the “arms dealer” to as much of the cloud as possible, but in our little corner of the enterprise technology landscape, the answer is yes, especially to Workday.  With SAP, I think it’s more about the combination of running their on-premise and SaaS apps on HANA that has tweaked Oracle.  So many of SAP’s customers do run today on Oracle that any significant movement there to HANA would hit Oracle where it hurts.]
• Has HANA so upset Larry’s view of what’s fair in love and database war that he’s determined to rid the planet of HANA by getting out in front with his own cloud and then in-memory alternatives?  [6-30-2013 — yes.
• Are Marc and Zach, not unlike the Manchurian Candidate (not the remake but the original, in which a super scary Angela Lansbury played the Larry role), mere puppets whose early Oracle training was part of a many decades long plan for enterprise technology dominance (in all honesty, the Manchurian Candidate tie-in is entirely my own reaction as far as I know)?  [6-3-2013 Of course I didn’t mean this literally, but there’s clearly a simpatico, perhaps built up from previous togetherness that has been unleashed.]   or
• Is this just “cloud” cover for Oracle’s drubbing in the markets after a not great quarter, a lot of cloud action set in motion when Oracle realized that their current financial and business results would be disappointing?  [6-30-2013 — I really don’t know how far in advance of announcing poor financial results a firm as well-managed as Oracle would have had a sense that things weren’t going as well as they’d like, but I do suspect that this week’s deals were more about addressing a broader and more strategic set of downward pressures on all the firms involved than about the exigencies of any one quarter’s results.  That said, there was a slight flavor of these deals, which may well have been some time in the making, coming together quickly so as to distract attention from near-term business results.  Whatever else was happening, all the firms involved but especially Oracle got far more coverage out of these announcements than they could have bought.]

There’s been a ton of terrific coverage from bloggers/reporters at (and this is just a subset) EnterpriseIrregulars, Diginomica, ZDNet, Constellation, IDG, AllThingsD, Appirio, InfoWeek as well as from the financial press and individual bloggers, so I know you’ll find something for everyone in the many different views expressed.  As for me, I’m just beginning to develop a point of view on what all of this means, but I’m sure we’ll understand these developments a lot better when they move from press releases and news conferences to actions on the ground.  In the meantime, I’ll probably have nightmares again, something that happened after I saw the Manchurian Candidate when it opened in 1962.

[Full disclosure:  Workday has been a recent client as have been several competitors, including Infor, ADP and Ceridian.]