Oracle Lets Rival Salesforce.com Pitch its Customers

By Jim Finkle

BOSTON, Oct 7 (Reuters) – Oracle Corp has unexpectedly invited the CEO of archrival Salesforce.com Inc to speak at its annual users’ conference, giving him a chance to hawk his goods to Oracle’s customers.

Both companies are vying for control of a $9-billion-a-year market for software that businesses use to manage sales, marketing and contacts with customers.

Billionaire Larry Ellison’s Oracle trails Salesforce in the fastest-growing segment of that market — programs that the software makers host at their own data centers and deliver to customers over the Internet. Analysts say that Oracle will announce new web-based products that compete with Salesforce at the conference, which begins on Sunday.

It was unclear why Oracle allowed Salesforce Chief Executive Marc Benioff to speak at the conference — in what will be the first time the Salesforce CEO has ever appeared on stage at the event. Oracle spokeswoman Deborah Hellinger declined comment.

"Given that Oracle has been Salesforce’s whipping boy for the past 10 years, it does seem a little ironic," said Nucleus Research analyst Rebecca Wettemann.

Ellison was an early investor in Salesforce and an early member of its board. Benioff, a former Oracle employee, kicked Ellison off the board after Ellison started aggressively selling software programs that competed with ones from Salesforce.

Wettemann also said it was odd that Ellison had not invited NetSuite Inc (N.N). Ellison founded NetSuite, also a maker of web-based software.

"If you’re going to have a software as a service company at your own event, why not the one that you own?" she said.

Competition in the web-based software business is intense because it is among the fastest growing areas of the tech industry. Researcher Gartner estimates that sales of web-based sales management software will more than double from $1.9 billion in 2008 to $4 billion in 2013.

Oracle, the world’s biggest maker of database software, invited Benioff even as he launches a new ad campaign that urges Oracle database customers to switch to Salesforce’s web-based software.

Salesforce spokesman Bruce Francis said the campaign encourages businesses to follow Dell Inc (DELL.O) in using Oracle’s database and other software with Salesforce’s web-based programs.

In one example of the campaign, a billboard on the highway in San Francisco says that "Dell enjoys the best of both worlds, visit Salesforce @ Oracle Open World."

Dell CEO Michael Dell, whose photo appears in the ad, will join Benioff on stage in his Oct. 13 speech at Oracle World.

Francis said that Salesforce approached Oracle about a month ago to ask if Benioff could speak. He declined to say whether Ellison was personally involved in making the decision.

Investors have long speculated that Ellison might acquire Salesforce to expand his web-based software business.

They held at least two rounds of talks on the matter in 2007, according to a person familiar with those discussions.

In an interview in June, Benioff declined to say whether a deal might be in the works, but added that Ellison had missed out on an earlier opportunity to acquire Salesforce.

"If he wanted to buy it, he would have," Benioff said in the interview. (Additional reporting by Anupreeta Das; Editing by Gerald E. McCormick and Paul Thomasch)