# 7 big questions out of the Oracle-Salesforce lovefest

Sorting through the playback of Thursday’s conference call co-starring Oracle (s orcl)CEO Larry Ellison and Salesforce.com (s crm) chairman and CEO Marc Benioff talking about their new-and-improved alliance, I was struck by the Mac and Tosh politesse they exhibited. It was all “After you, Larry,” and “It’s always better when you go first, Marc.” But, all fun aside, here are my questions about the deal.

1: Oracle professes a new fast, cheap, agile message, but can it change?

If so, that’s the real headline here. Oracle’s message for its scale-up stacks was all about premium functionality and price to match and its sales team drives that home on every call — especially at renewal time. Now, that’s shifted in the cloud era.

What cloud customers expect, said Ellison, is:

“…rapid implementations and economic benefits. Exadata is designed to be the lowest-cost cloud infrastructure in the world and deliver the highest performance. You don’t have to give up one to get the other. I think that’s what makes the Exadata, Oracle Linux, Oracle database combination attractive to cloud providers like Salesforce.”

If you ask most current Oracle enterprise customers if this is how they see Oracle’s stack you’ll likely get a stare of incredulity. Can Oracle change its licensing and pricing structures for ordinary buyers not just the Salesforce.coms and NetSuites(s N) of the world? (Oracle and NetSuite announced another integration pact earlier in the week to integrate NetSuite ERP with Oracle’s HCM applications for mid-market customers.)

And, not for nothing, massive cloud computing to date as exemplified by Amazon Web Services (s amzn) has been dominated by scale-out massively deployed commodity hardware, not the mainframe-like monoliths that Oracle is selling.

2: Is this really a rip and replace for either company?

The message on the call was Salesforce.com will run Oracle applications in-house and Oracle will do the same for Salesforce. Totally makes sense to test out the promised integrations. But will Oracle run Salesforce CRM en masse? Of course not.

Here’s a little-known fact: Salesforce.com runs Workday(s wkday) human resources software as well as Oracle HCM. Will it dropkick Workday because it competes with Oracle? Not likely.  Will Salesforce.com rip out all the standard X86 servers it now runs on in favor of a wholesale forklift to Exadata? Insiders say no.  Ellison said when Oracle buys new companies, chances are they’re running Salesforce CRM, and up until now, Oracle forced a move to Oracle CRM. That will now stop, Ellison said, because Oracle needs to test out its Oracle-Salesforce integrations first hand.

3: Is Salesforce open to on-premises CRM deployments?

Benioff left that door ajar.  He noted that Salesforce is committed to delivering a U.S. government version of its service that runs on dedicated hardware. He said:

“That is an iteration of our stack where we do have a bifurcated infrastructure for the government and for other organizations in the world. If they came to us and said that they wanted to have that kind of capability, of course, we would be willing to discuss that with them. But, it hasn’t been something that the banks, telecom companies, media companies, technology companies that we deal with every day are looking for.”

4: Will these two hyper-competitive companies with hyper-competitive sales forces sell together?

That’s a no brainer — nope. “Oracle will sell Oracle and Salesforce will sell Salesforce. The applications and integrations will be available from either company,” Ellison said. The design goal is for a user to log on to her Oracle and/or Salesforce application, hit a button and launch the needed integration between Oracle HCM or other app with Salesforce CRM with no muss, no fuss.

5:  Is this really a meeting of the minds of an old-line IT giant and a new-age cloud company?

Not really. Sorry, Marc, but Salesforce.com is nearly 15 years old and the difference between it and a traditional enterprise software company is not that big. In the early days, the message from Salesforce.com and other SaaS players was: Pay as you go, add and delete users all the time. It’s cheaper and more agile.

But that reality morphed into a world where the SaaS provider wants a year’s payment up front and pushes for three-year contracts. And let’s face it, Salesforce is not at all that inexpensive — the enterprise version is $125 per user per month, billable a year in advance. The higher-end premium version with round-the-clock support is$250 per user per month (also billable a year in advance.) That’s a pretty enterprisey bill.

6: Will Salesforce’s Force.com PaaS open up to Java?

Unclear. Benioff deflected that question. Of course, the company works with Java and delivers “Java as a service through our Heroku environment,” he said, noting that the company wants to do more there. Ellison pushed it further:

“Hopefully, this is not the last announcement that Oracle and Salesforce do together. We haven’t spent a lot of time talking about the Java part of the platform. We focused on the database part of the platform. But there is a Java part of the platform, and I think there are going to be opportunities for Oracle and Salesforce to work together on the language part of the platform. Making sure that Java and Force.com complement each other, and that people can build out — can build those applications in the way they want to build those applications.”

This whole dueling PaaS question has dogged Salesforce since its acquisition of Heroku a few years back and it just hired a new  CEO for Heroku, Tod Nielsen, who will have to manage that situation.

7:  Is this the end of Larry-and-Marc sniping?

We can only hope not. Who didn’t love Benioff calling Exadata a “false cloud” or “cloud in a box” or Ellison bumping Benioff from his Oracle OpenWorld keynote?

Benioff said the fun won’t end but the perceived hostilities might. “We’ve always enjoyed working together and having fun with each other, and hopefully it will be the end to us getting a little too revved up at times, which occasionally has happened.”