Benioff, Denied OpenWorld Keynote, Mounts Podium Anyway

Salesforce.com CEO Marc Benioff claimed Wednesday that his keynote at Oracle OpenWorld was cancelled at the last minute by Oracle CEO Larry Ellison after Benioff posted a derogatory comment about Ellison on Facebook.

Benioff acknowledged that he posted, then apologized for, a comment that Ellison "had set a low bar for Oracle OpenWorld keynotes" with his welcome address Sunday. Benioff made his post on Facebook after Ellison's address.

Benioff himself was slated to offer an Oracle OpenWorld keynote Wednesday, but Benioff said Oracle sent him an email at 3:30 p.m. Tuesday, stating his address had been cancelled. He said he and his staff scrambled to stage the talk anyway at the Ame restaurant in the St. Regis Hotel, across the street from the Oracle OpenWorld site. Salesforce.com staff members stood on street corners Wednesday morning handling out flyers advertising the replacement talk. Signs were posted, "The Cloud Must Go On." When the time came for Benioff to speak, a long line stretched out the front of the restaurant and down the block due to the limited accommodation of the site.

"I heard Marc speak last year and thought he had much to say. I was looking forward to his talk this year," said Lars Laaksonen, managing director of Netum, a technology consulting firm in Tampere, Finland, as he waited in line outside the St. Regis. Laaksonen was among those who could not be admitted to the talk.

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In the question and answer session after his talk, Benioff said: "I apologized for my remark. I said I was just being competitive, but he took it personally. In my world, this is like tennis, we're batting the ball back and forth. It's not personal," Benioff explained to a Q&A session after his talk at the Ame.

The Ellison-Benioff relationship, an on-again, off-again thing, goes back to the days when Benioff worked as an up and coming marketing executive at Oracle and was regarded by many as an Ellison protege. Ellison was an early investor in Salesforce.com, but later financed the start of a competitor, NetSuite, which has become a supplier of a set of business applications to small and midsize business. When Benioff learned of the NetSuite initiative, he asked Ellison to resign from his position on the Salesforce.com board of directors.

Asked again about his Facebook posting, Benioff quipped: "He did train me. I'm just trying to be a good student and do what he taught me to do. He does a good job of putting his competitors on the spot," he said, citing Oracle's recent jabs at HP. Nevertheless, Benioff said he was "surprised and disappointed" that the tiff resulted in his address being cancelled.

Despite the haste with which Salesforce.com had organized a Benioff talk next door to OpenWorld, it was fully equipped to stream the presentation live to the Salesforce.com booth inside the Moscone Center on the show floor and to its website. The event in some ways marked a return to the guerilla marketing tactics that Salesforce.com had used versus established application vendors, such as SAP. Benioff wrote about staging a guerilla marketing event at a SAP user group meeting in his book, Behind the Cloud.

One result of Oracle cancelling the keynote is that it will have to pay back to Salesforce a $1 million fee it paid as a show sponsor and occupant of a keynote slot. "They told us they were going to give us our $1 million back. We'll see," Benioff said.

In response to a question from InformationWeek, Benioff also defended the multi-tenant approach to Salesforce.com CRM applications and cloud computing in general. Ellison disparaged the multi-tenant approach a year ago in his opening address to Oracle OpenWorld 2010. He said at that time that he opposed the form of cloud computing that put different customers' data on the same host in a multi-tenant environment.

Benioff responded that banks do not set up a separate server and software for each new customer who opens an account. They run customer data with safeguards through the same systems to tally individual accounts.

Multi-tenant computing is "more reliable, more secure, and more available. It's the future. Single tenancy goes hand-in-hand with selling proprietary mainframes," Benioff responded. In case anyone was wondering what he meant, he also referred to Oracle "Exadata mainframes."

"We can achieve economies of scale and drive costs down radically through multi-tenant systems," he added.

Benioff repeatedly referred to his Ame restaurant talk as a "keynote," even though he was off the Oracle OpenWorld reservation. He used much of his talk to reprise his themes at the Dreamforce Salesforce.com user group meeting in San Francisco at the start of September, where he said Salesforce was trying to enable the social networked enterprise.

Salesforce revenue appear to be headed for the $2 billion mark in 2011 and Benioff said, "We want to get to be a $10 billion software company." VMware and Salesforce, both Oracle competitors, are the next candidates to become $10 billion companies, he said.