Way back in 2008, Larry Ellison talked about a software sales slowdown: "Customers are signing up for fewer multiyear projects," he said, referring to software license renewals. (See SJ Mercury, 12/19/08, E1.) Oracle (ORCL) "draws roughly half its revenue from software license renewals. These [renewals] provide a strong and stable source of cash because the high cost of switching to a new vendor helps keep customers in Oracle's fold" (Id. at 4E). Since 2008, Oracle seems to be doing well and much better than its competitors.
At the same time, Salesforce.com's (CRM) Marc Benioff continues to nip at Ellison's heels. I've attended shareholder meetings at Oracle and Salesforce.com, and if you ever want to rile up either CEO, mention the other CEO. When I mentioned Oracle to Benioff, I received a very long speech about Oracle's old-fashioned way of doing business. Later, when I mentioned Benioff's comments to Ellison, Ellison cut me off and immediately started bashing Salesforce.com. I still remember one particularly memorable riposte: Ellison said something along the lines of, "Here's some advice to Salesforce--make money." [Salesforce.com has, shall we say, a more uneven earnings history than Oracle.]
Forget about Apple (AAPL) vs. Microsoft (MSFT)--the latest Silicon Valley soap opera is between Salesforce.com and Oracle. If someone manages to make peace between Ellison and Benioff, we should send him or her to make peace in the Middle East--it'll be a cakewalk after navigating these men's intelligence, ambition, and egos. I'd volunteer to mediate, but I'm afraid I'm not big enough to restrain the very tall Benioff if the mediation devolved into an old-fashioned fistfight. Benioff and Ellison should resolve to sit down together and hash out their differences in 2010--now that's a new year's resolution I'd like to see come true.