Oracle's Ellison Bows to Pressure, Teams With Salesforce.com

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NEW YORK (TheStreet) -- Oracle CEO Larry Ellison swallowed his pride Tuesday, essentially declaring that he will now be putting aside his differences with arch-rival salesforce.com and his CEO nemesis Marc Benioff in a frantic attempt to build up Oracle's presence in cloud computing.

For years, Ellison had ridiculed the cloud computing trend as being a mere fad or "water vapor" as he liked to call it. But now he's desperately trying to play catch-up in this competitive space in hopes of mining new areas of growth as investors grow increasingly impatient with the company's sluggish sales momentum.

Just after announcing a cloud partnership agreement with traditional competitor Microsoft Monday, Ellison on Tuesday said that Oracle and salesforce.com have agreed to form a nine-year partnership covering all three areas of cloud computing: applications, platform and infrastructure.

Under the agreement, salesforce will use the Oracle Linux operating system, Exadata engineered systems, the Oracle Database, and Java Middleware Platform. Meanwhile Oracle plans to integrate salesforce.com into Oracle's Fusion HCM and Financial Cloud, and provide the core technology to power salesforce.com's applications and platform. Salesforce.com will also implement Oracle's Fusion HCM and Financial cloud applications throughout the company.

"We are looking forward to working with salesforce.com to integrate our cloud with theirs," Ellison said in a statement. "When customers choose cloud applications they expect rapid low-cost implementations; they also expect application integrations to work right out of the box -- even when the applications are from different vendors. That's why Marc and I believe it's important that our two companies work together to make it happen, and integrate the salesforce.com and Oracle Clouds."

Ellison and Benioff have had an acrimonious relationship dating all the way back to 2000 when he was cut from salesforce.com's board of directors after Oracle began offering competing products.

Written by Andrea Tse in New York

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