The more I look at it the more I'm convinced that Marc Benioff, CEO of Salesforce.com, will replace Larry Ellison, CEO of Oracle when he retires.
Of course, that would mean Oracle acquiring Salesforce, but Apple got back Steve Jobs when it acquired his Next corp. And I have heard from a very good source that earlier this year Salesforce had approached Oracle about a possible buyout at $75 per share, which would be a 50 per cent premium at the time, a reasonable premium.
Larry Ellison is now 63 and very close to retirement and Marc Benioff is by far and away the best candidate for the job.
One of my commenters asked why would Mr Benioff want to run a dinosaur such as Oracle?
Consider this: 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.
Mr Benioff is cut from the same die as Mr Ellison, he is an Oracle veteran.
Take a look at this excerpt from Fortune magazine December 2004: The Big Benioff - by Daniel Roth
At 21, Benioff joined Oracle and quickly rose through the ranks: at 22 he was named Rookie of the Year; at 25 he became the company's youngest vice president; later he ran marketing. Over the years, he developed a close relationship with CEO Larry Ellison.
It was clear why: Benioff was Ellison 2.0. "Marc would get people believing in his vision and supporting whatever project he wanted to do," says Ray Lane, former Oracle president and now a partner at venture capital firm Kleiner Perkins. "That's Larry." At global management meetings, Lane would have Benioff and other development managers come to discuss their projects. "These other guys would put the crowd to sleep," says Lane. "When Marc talked, these people would jump to their feet and say, 'This is what I want to sell!'
Fortune - The Big Benioff
Yes, Mr Benioff has said unkind things about Oracle and the rest of the enterprise IT giants such as SAP, but that's just showmanship.
Take a look at this from just a few days ago on News.com: 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.
Benioff to succeed Ellison. It all makes sense, IMHO.