Salesforce’s Benioff Returns Serve Against Ellison, Mocks Oracle’s Hardware

Salesforce.com CEO Marc Benioff tried to take the high road after Oracle (NSDQ:ORCL) CEO Larry Ellison earlier this week bashed his company as a cloud computing pretender. But unfortunately, the high road was apparently closed.

In a keynote speech Wednesday at the Novellus (NSDQ:NVLS) Theater next to San Francisco’s Moscone Center, Benioff’s started off with a conciliatory tone, thanking Ellison for the publicity he generated with his comments.

"We come in peace," Benioff told the audience as he took the stage. "We are cloud people, and because of that we are peaceful people."

Of course, Benioff isn’t one to shrink from criticism, particularly when it comes from his former boss and mentor. Benioff proceeded to return serve against Ellison with characteristic zeal, peppering a 45-minute presentation with jabs at Oracle’s new Exalogic Elastic Cloud server, a massive piece of hardware that Oracle is positioning as a private cloud-in-a-box.

"I’m not going to show you new computers that are taller than I am, and I’m not going to show you a cloud in a box, because clouds were not meant to be in a box," Benioff declared, triggering a wave of giggling through the audience of roughly 1,000 OpenWorld attendees.

Benioff also took aim at Oracle’s mantra of software that’s optimized for the underlying hardware, which reflects the company’s ongoing integration of Sun Microsystems. In the cloud, Benioff said, "You don’t have to have hardware and software engineered to work together."

Ellison, in his opening keynote at OpenWorld on Sunday, said Amazon (NSDQ:AMZN)’s Elastic Compute Cloud (EC2) meets his own definition of a true cloud computing service, but said Salesforce.com "is really only one or two applications that run on the Internet." Ellison also criticized Salesforce.com’s security model as well as the company’s policy of billing on a per-user basis instead of for the amount of resources consumed.

In Salesforce.com’s view, the key attributes of the cloud are multi-tenancy, speedier performance, lower cost, and the ability to pay as you go and scale up or down as needed, Benioff said, noting that Salesforce’s customers run from small companies all the way up to the largest enterprises.

"The cloud is about democracy," Benioff said. "It’s not about the very rich or elitist or cult of high end."

Cloud computing is also about efficiency, Benioff said. Salesforce.com serves its entire 83,000 global customer base, as well as the 300,000 apps these firms are running on its cloud infrastructure, on 15,00 Dell (NSDQ:Dell) PCs, Benioff said, drawing a line between his company’s strategy and Oracle (NSDQ:ORCL)’s growing focus on hardware.

"Beware of the false cloud," Benioff said. "If you have to buy more hardware, it’s not really cloud."

Beneath all this posturing, Benioff did touch on some real news. Salesforce.com on Wednesday unveiled Chatter 2, an update to the Chatter client it rolled out in June that applies Facebook-like functionality to business settings.

Chatter 2 adds a feature that lets users recommend colleagues and groups, as well as Chatter feed filters that give users control over the volume and types of updates they receive, such as specific customers and deals.

"It looks and acts and feels like Facebook," said Kraig Swensrud, senior vice president of product marketing at Salesforce.com, said during the keynote. "Instead of status updating about your personal life, you update about work, and seek advice and feedback."

Dell has 20,000 employees using Chatter, and the use cases span from helping boost the company’s sales presence and obtain better leads to enabling salespeople to get to know their customers better, said John Miles, a vice president in Dell’s Business Information Organization.

But Chatter isn’t just about following people: In the business context, being able to follow customers, and keep track of critical support cases and other job-pertinent information is invaluable, Swensrud said.

Increasingly, social networking is happening from mobile devices, and with that in mind, Salesforce.com later this year will roll out a native Chatter 2 app for the iPhone, iPad and Blackberry.

"This is Facebook-style collaboration, but it’s built for your business," said Swensrud.