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Friday, June 21, 2013

Oracle And Salesforce: A Data-Sharing Deal

Some of the best trash-talking in tech may be over. The Oracle Corporation and Salesforce.com, two of the more contentious competitors in software, are about to announce a close alliance involving software delivered via cloud computing.

“Larry and I both agree we need to unite our clouds,” said Marc Benioff, the founder and chief executive of Salesforce. “Oracle is a very important part of our strategy.”

Next week, according to people familiar with the agreement who were not authorized to speak on the record, Oracle and Salesforce will announce that their products will be able to easily share data.

That way, customers can use things like customer contact and product details that they have on Salesforce with Oracle’s applications, which include similar sales and people-management software. The data sharing could make both products more attractive to buyers, because it will increase what companies can do with the software.

It is surprising, given the sometimes warring persnalities who run both companies. In October 2011, Oracle all but kicked Mr. Benioff out of a conference that Mr. Benioff had paid $1 million to speak to, after Mr. Benioff criticized the onstage performance of Larry Ellison, Oracle’s chief executive. Such payments to appear onstage at another company’s corporate event are common, but getting kicked off is not.

“Larry was not prepared,” Mr. Benioff said at the time. “You don’t have somebody over to your house to tell better jokes than you.”

Since the break between the two, Mr. Benioff said, “I’ve met with Larry a number of times, and I’ve never been more excited about our relationship with Oracle â€" he’s doing a great job.”

Mr. Benioff is a former Oracle executive, and Mr. Ellison is an early investor in Salesforce. Salesforce applications rely on Oracle’s database.

More importantly, in the last two years software delivered over the cloud h! as become a common part of business, forcing many companies to change. I.B.M., for example, recently said it would pay $2 billion to beef up its cloud offering, and has reorganized its applications to better address the managers of smaller corporate departments.

Salesforce, which once operated as something of an upstart, is feeling the increased competition, and has broadened from sales software to online marketing and advertising products.

“There’s a definite change of tone around here,” said a Salesforce executive, “It’s shocking; we’re growing up.”

For its part, Oracle is battling an image not of growing up, but of growing old. On Thursday the company announced lower than expected earnings, which it ascribed to a tough economy overseas. Cloud-based software grew well, but remains a small par of its overall revenue. The company also said it would raise its dividend and announced a big stock buyback, behaviors usually undertaken by tech companies when they begin to grow more slowly. Oracle officials declined to comment on the record about the Salesforce deal.

Oracle has been among the most solitary of tech companies, relentlessly acquiring others, trash-talking with the best of them, and scrapping in multiple high-profile court battles. In a call with analysts after Thursday’s earnings announcement, Mr. Ellison belittled both SAP, a longtime competitor, and Workday, a cloud company.

Like I.B.M., Oracle appears to be going after a much bigger market of smaller-sized deals by lining up with Salesforce and others. Like many companies, it has often struck alliances while competing, but rarely with such public vigor.

On Monday, Mark Hurd, Oracle’s co-president, will make a joint announcement with Steve Ballmer, Microsoft’s chief executive, and Satya Nadella, the head of Microsoft’s server and tools business, which also includes its substantial cloud computing business. That announcement is expected to include making Oracle’s products more broadly available in Microsoft’s cloud, but will probably not involve Oracle’s latest database.

Earlier this month, Oracle announced a partnership with Dell intended to give it access to more small and medium-size businesses. Mr. Hurd appeared in a video at a Dell event to announce that deal.