Full text of Marc Benioff's internal memo to salesforce staff on Oracle/Siebel deal

Summary:Never at a loss for words, salesforce.com CEO Marc Benioff who woke up this morning to find out that his former boss and investor Larry Ellison was now his biggest competitor, apparently issued the following internal memo to all salesforce.

Never at a loss for words, salesforce.com CEO Marc Benioff who woke up this morning to find out that his former boss and investor Larry Ellison was now his biggest competitor, apparently issued the following internal memo to all salesforce.com employees:

Oracle put Siebel investors out of their misery today.  We have been doing that for Siebel customers for years.  Our announcement today at Dreamforce will accelerate that. It’s the end of software.  Client/Server software is being consolidated by Oracle just as mainframe software was consolidated by Computer Associates. Oracle’s strategy is simple, instead of innovating, buy as much installed software as possible, call it all Oracle Fusion, and make sure it all uses Oracle’s database.

Now, the same thing that happened to Peoplesoft will happen to Siebel, it will die.  Customers will look for new solutions and new providers.  Employees will look for new employers. Siebel on Demand, a joint venture between Siebel and IBM, will be the first to be buried. Siebel on Demand is written exclusively on DB2 and Websphere and runs in IBM data centers.  Oracle will kill it.  Oracle does not sell DB2.

Now, the opportunity to be the global leader in the CRM market has opened for salesforce.com.  Our dream is becoming a reality as the world will move to new on demand solutions. Already the fastest growing public CRM company in the world, with over 50% market share in On Demand CRM, salesforce.com is well poised to become the world’s new global CRM leader.

It is auspicious that this is the very day that we are announcing our new strategy at Dreamforce with AppExchange (www.appexchange.com) and our Winter ’06 release.

Aloha, Marc

At first, I thought the DB2/Websphere bit was little more than FUD and rhetoric.  But after searching around a bit, I found a white paper that appears to confirm the complete reliance of Siebel's CRM OnDemand on IBM technologies. Benioff is right. This really puts an interesting spin on the IBM acquisition since it's difficult to imagine Oracle CEO Larry Ellison ever allowing something so dependent on IBM to exist within his portfolio.

Meanwhile, Greg Gianforte, CEO of RightNow Technologies (another on-demand CRM darling) echoed Benioff's predictions regarding the fossilization of Siebel's on demand offering as well as his characterization of Oracle as the new great consolidator of software companies, taking the place of the former crown holder on that front: Computer Associates.  Wrote Gianforte via email:

Enterprise software is getting exciting! One more dinosaur is extinct.  Oracle is becoming the Computer Associates of application software. Continued consolidation of the old guard of enterprise software will continue as software purchasing continues to shift to on demand vendors. Siebel tried to make this transition, but were too late. Oracle and SAP have similar challenges as well, including customer satisfaction, which has not been a hallmark of any of the 'old guard' enterprise software vendors. Unless these companies truly embrace the hosted model, similar fates face both these organizations.


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Topics: Oracle

About

David Berlind was fomerly the executive editor of ZDNet. David holds a BBA in Computer Information Systems. Prior to becoming a tech journalist in 1991, David was an IT manager.

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