Salesforce.com CEO says Oracle’s ‘Proprietary’ Systems Miss Cloud Computing Mark

"I am sorry we are not at the Novellus (NSDQ:NVLS) Theatre," Benioff said in a speech that had been moved to a restaurant at the St. Regis Hotel, a few blocks away from Oracle OpenWorld. "You can see this is a different message than Oracle OpenWorld. It is not a message of proprietary mainframes. This is not a message of closed systems. This is a message of open systems, of a cloud-based world that is social, that is mobile."

Oracle, for its part, which has heavily promoted its tightly integrated hardware software systems at Oracle OpenWorld this week, said in a statement that Benioff’s session was moved to Thursday at 8 a.m. PST, "due to the overwhelming attendance at Oracle OpenWorld" that prompted "several session changes." Oracle OpenWorld has attracted some 45,000 attendees to San Francisco this week.

Benioff said Salesforce.com was contacted about the cancellation of his session at 3:30 p.m. PST on Tuesday, which sent his team scrambling to organize a new venue at the St. Regis. Salesforce.com used Facebook and Twitter to inform customers and OpenWorld attendees of the change in time and place.

"Now Oracle is saying that we can go on tomorrow at 8 a.m. when the show is over," said Benioff. "I want to thank Oracle for that. They also offered an 8 a.m. slot on Sunday at their new Alcatraz Americas Cup facility." The reference to the Americas Cup facility was a swipe at Oracle CEO Larry Ellison who is a member of the Americas Cup sailing team.

Benioff charged that Oracle is ignoring the social media and cloud computing revolutions even as CIOs in business are embracing the technology.

"This is a social revolution and it is not just about the consumer," he said. "It is about enterprise. You look at CIOs embracing this saying: ‘We want this change! We want this transformation!’ But is that what we are hearing at this conference? Are we hearing that the future of our industry is social? That the future of our industry is social? That the future of our industry is cloud?"

Benioff said his cloud and social computing revolution message is a "contrarian" view in the Oracle (NSDQ:ORCL) universe. "You can be (former Eygptian President Hosni) Mubarek (who was forced to step down in the wake of a social revolution that leveraged Facebook and Twitter) and say it doesn’t exist," said Benioff. "You can say it doesn’t exist. You can say we don’t want to hear about it. But the reality is the people now have an alternative way of communicating. You don’t have to have the formal Oracle OpenWorld communication to re-organize in a few hours. You can use social media. That is how you all got here."

Benioff, a former Oracle employee, said he was disappointed that Oracle OpenWorld is not addressing the compelling future that comes with cloud computing and social networks. "This show, Oracle OpenWorld, has mostly been about a next generation mainframe computer," he said. "The disappointment for me is that when I was at Oracle, Oracle OpenWorld was about ideas and the industry and what was happening next, (things) we could get excited and motivated about."

"There is something really exciting happening in our industry," continued Benioff. "Something amazing that is happening in our industry. Something spectacular that we need to tap into, that we need to connect to transform our industry, to get away from proprietary hardware, to get away from the proprietary software and to move into something that we call the cloud." Benioff claims that his focus on changing the world through cloud computing is what prompted the cancellation of his keynote session. "I think that is why indeed we were cancelled this morning," he said. "That is not the message that Oracle wants. I respect that. But we are not here to sell more computers this morning."

Benioff warned that those companies that do not use social networks to listen to their customers and employees will face dire consequences. He pointed to the sharp drop in market valuation experienced by both Hewlett Packard (NYSE:HPQ) and Netflix in the wake of strategic decisions that were viewed negatively by investors.

"It is about social power," he said, referring to the social networks that Salesforce.com has built for companies like Burberry, Bank of America and General Electric’s CNBC unit. "It is really about listening to customers and employees in a whole new way. If you are not listening to your customers and employees and if you are not paying attention to what is going on with them, then you will face what HP has faced. You will face what Netflix has faced over the last several weeks."