NetSuite vs. Workday: the Oracle-PeopleSoft feud continues

A new report shines a light on a long-standing Silicon Valley rivalry.

The spectre of Oracle's Larry Ellison looms. (Photo illustration: Andrew Nusca)

Who doesn't love a good technology feud?

Microsoft vs. Apple goes back a long way. Silicon Valley (San Francisco Bay Area) vs. Silicon Alley (New York City) is the classic U.S. startup battle. Before Gizmodo vs. Engadget, there was CNET vs. ZDNet. (True story.) And in enterprise land, there's no better story than Oracle vs. PeopleSoft, a fight that continues on in the cloud as NetSuite vs. Workday.

In this weekend's New York Times,Quentin Hardy has a lovely look at this longstanding rivalry, which is, as so many of these things are, quite personal.

A summary, for those unfamiliar with the tale: Oracle Corp. is founded by Bob Miner, Ed Oates and Larry Ellison in 1977. PeopleSoft is founded by Ken Morris and David Duffield in 1987. One brought innovation to object-relational databases; the other changed the playing field with management software for human resources, operations, finance and marketing departments. In 2003, Oracle made a bid for a hostile takeover of PeopleSoft; in 2005, it succeeded. A few months later, Oracle fired half the PeopleSoft crew as part of a greater workforce reduction.

Rewind to 1998: NetSuite is founded by former Oracle programmer Evan Goldberg with backing from Ellison. Now fast forward to 2005: Workday is founded by Duffield and ex-PeopleSofter Aneel Bhusri. Both companies offer business management software in the cloud-based "as-a-service" model, which proved cheaper and more nimble than the on-premise products that Oracle and SAP offer. Staring the future in the face, both established companies begin making acquisitions to catch up, as their younger counterparts pick up steam.

You can see where this is headed: the same business management players are going head-to-head again, nearly a decade later. Though revenge isn't the goal, the competition remains intensely personal.

Hardy reports:

Mr. Bhusri, a partner at the venture capital firm Greylock Partners, is on the board of several other cloud companies.“They are all companies in the Dave Duffield model — the good guy model, as opposed to the other guy,” Mr. Bhusri said. An open, self-effacing man, he declined to identify the “other guy,” but added, “I would be amazed if Oracle does not buy NetSuite.”

Game on.

Here at ZDNet, we've been watching both companies intently to see how things hash out: both smaller companies have hit their numbers with ease in recent quarters, even as their larger rivals begin to stumble and fall as business customers reconsider the on-premise model altogether. The larger companies have made their winning strategies clear, with mergers and acquisitions in the pipeline as they continue to plow their way into a cloud-based future.

Which prompts the question: what will happen next?