Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

Joining The Dots: Benioff Seems Likely To Succeed Ellison At Oracle

Posted by Tom Foremski - March 24, 2008

I'm convinced Marc Benioff, CEO of Salesforce.com will succeed Larry Ellison, 63 years old, as CEO of Oracle.

I've laid out my reasoning here on ZDNet: Tom Foremski: IMHO.

Oracle has a 100bn market valuation versus Salesforce at $7bn. Oracle profit margin is 24 per cent Salesforce is 2 per cent. Oracle revenue is $20bn, Salesforce revenue is $749m.

Salesforce could become the next Oracle but it would take a decade or more of tough competitive battles. Salesforce could become Oracle sooner than that if it were acquired. Why wouldn’t Marc Benioff want to be king of the hill rather than stuck in an online software company that is in direct line of fire from several competitors and several key internet trends?

Oracle has a lock on massive markets that won’t change much anytime soon. Salesforce is in the on-demand software market which means customers can cut and switch services much more easily than payments to Oracle.

Also, Mr Benioff has recently been saying nice things about Oracle.

Benioff takes stock of software shifts - by Charles Cooper and Dan Farber.

When I left Oracle nine years ago, Oracle's revenue was $10 billion a year. Today it's $20 billion a year. Where Oracle has innovated is in the business model. You've seen substantial growth and a substantial return to Oracle shareholders through that change. With SAP, you really have not seen innovation in the last 10 years. If you think about what is the one thing that SAP has ever innovated, what have they created that's unique to the industry or value-added technology? I have a hard time thinking about what SAP is going to be known for at the end of the day.

If I was a Salesforce shareholder I'd want a piece of the rock. If I was an Oracle shareholder I'd want someone like Mr Benioff in charge.

(BTW I don't own CRM or ORCL.)

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