Oracle and Salesforce: Tech's unholy alliance

June 28, 2013: 9:28 AM ET

Long-time opponents are teaming up.

No more?

No more?

FORTUNE -- It's the end of an era. Or the beginning of one, as Oracle and Salesforce.com would describe it. The formerly sparring enterprise tech companies hosted a conference call for press and analysts Thursday afternoon, in which they outlined a new, nine-year partnership through which their respective cloud-based applications will work hand-in-hand.

"The value we can provide to customers is just awesome," said Marc Benioff, CEO of Salesforce (CRM), the largest provider of customer relationship management tools and a pioneer in cloud-based software. "This is a new world, this is a new time. Companies like Salesforce and Oracle working together are evidence that that's how it has to be."

Salesforce and Oracle (ORCL) have competed in the past -- and the companies' CEOs have long maintained a vocal, often entertaining war of words. (Their rivalry landed at No. 31 on Fortune's Greatest Business Rivalries of All Time list.) Now the two companies say they plan to allow customers to easily deploy and integrate their various applications in the cloud. As part of the agreement, Salesforce has committed to using Oracle's database and other infrastructure technologies and to implement Oracle's Fusion human capital management software, used by HR departments. Oracle, for its part, has agreed to run Salesforce's flagship customer relationship management software, though it didn't specify how widespread its implementation would be.

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"Almost every time we buy a company, they are running Salesforce CRM," said Larry Ellison, CEO of Oracle, adding that he plans to "leave some of those companies on those applications."

Those same "out-of-the-box" integration capabilities will be made available to customers of both companies, though there won't be cross-selling involved. Oracle will continue to sell Oracle applications, and Salesforce will continue to sell Salesforce applications.

The alliance, while surprising, could make sense, especially for Oracle, which has been trying to push its way into the cloud. The company inked other partnerships earlier this week, with Microsoft (MSFT) and NetSuite (N), a cloud-based provider of enterprise resource planning software for small- and medium-sized businesses. And while customers may want to move to the cloud, they don't necessarily want all of their applications from one vendor.

But Thursday's call was a far cry from the tit-for-tat Ellison and Benioff have engaged in previous interactions. (Ellison once referred to Benioff's Salesforce as the "roach motel" of cloud services.) Instead, the two alpha males showered each other with compliments and kept telling each other they should "go first" when answering questions.

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"I couldn't be more thrilled to make this announcement with you today," Benioff said to Ellison at one point. (An aside: Benioff started his career at Oracle, where he stayed under Ellison for over a decade). Later in the call, he invited Ellison to attend Salesforce's annual "Dreamforce" conference. Ellison gladly accepted the invitation.

When asked whether the new partnership will mean the end to the "fun, entertaining potshots" of the past, Benioff said he hopes not. "That's one of the things I've enjoyed in our industry," he added. "We've always enjoyed working together and having fun with each other. Hopefully it will be the end to us getting a little too revved up at times."

Naturally, Ellison agreed with Benioff, saying "I'm sure both Marc and I are going to try to continue to be entertaining, while making sure that the entertainment never distracts from our commitment to work together." In other words, the era of entertaining potshots is over.

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About This Author
Michal Lev-Ram
Michal Lev-Ram
Writer, Fortune

Based in Silicon Valley, Michal Lev-Ram covers enterprise and mobile technologies for FORTUNE. Prior to joining FORTUNE, she wrote for CNNMoney, Fast Company, Popular Science and other business and technology publications. She was also a staff writer at Business 2.0 and holds a B.A. in journalism from San Francisco State University.

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