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The IT industry is changing: just look at Oracle and Salesforce

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June 26, 2013

Oracle and Salesforce have announced a partnership after years of throwing spears at one another, leading observers to ask what is going on in the IT industry.

News of the broad alliance between Salesforce and Oracle was announced yesterday, and will see Salesforce use Oracle's software and hardware, and Oracle will integrate with its own human capital management applications.

The nine-year contract guarantees Oracle a major customer, and gives Salesforce greater selling opportunities within Oracle environments-– and this is crucial these days, given Oracle's commitment to growing its share of the IT industry.

Of course, this comes as a bit of a surprise, given Larry Ellison's classification of Salesforce's cloud as a "roach motel" in October 2011, and Salesforce chief Marc Benioff's labeling of Oracle's on-premise tech as a "false cloud" in 2010.

But when you think about it, 'manufactured controversy' is still a way to stay relevant in an era defined by nimbler, smaller competitors, it would appear.

Given the manner the alliance was formed at the last minute, this could be a risky proposition as the combined Oracle and Salesforce offerings threaten its integrated suite of management systems.

It also highlights how Oracle has been forced to partner to retain relevance in a fast-moving world that deals mostly in the Cloud, and this announcement stacks on top of Oracle coming into Azure via a Microsoft tie-in, and the blessing of Dell as the company's preferred x86 box integrator.

The alliance comes after a series of weaker quarters for Oracle, during which the database giant has seen revenues in its much talked-up hardware division shrink.

It has also had trouble signing up new licensees for its expensive Fusion cloud apps, and has instead been growing money through increases to existing agreements.

Looking at it dispassionately, it seems that Oracle is squeezing its current customers for additional revenue, and having a difficult time getting new people to work in its stack.

The alliance also raises questions about Salesforce's utilization of the open source database PostgreSQL which sits inside the company's database platform.

Salesforce announced late last year that it plans to hire "40 to 50 additional people next year for a huge PostgreSQL project at Salesforce".

"Whatever the relationship between the Oracle cloud and Salesforce's work on Postgres is, they haven't stopped their public support of Postgres," says Josh Berkus, a core team member on the PostgreSQL project.

"They are continuing to hire PostgreSQL engineers," he added. Although the Oracle statement said that Salesforce would be running its main services on Oracle hardware and software, no mention was ever made of Heroku, a platform cloud that Salesforce owns and which runs exclusively on Amazon Web Services's infrastructure cloud.

In other IT news

Edward Iacobucci, a former IBM developer who co-founded the U.S. computer software company Citrix, died yesterday of pancreatic cancer at age 59, his former company announced.

His most recent venture was Virtual Works Group, a company he cofounded in Florida four years ago to better manage "data sprawl."

Facing rapidly declining health, he stepped down from his position as chief executive in mid-May.

"Ed's spirit of entrepreneurship, creativity, passion and persistence with just everything will always remain at the core of Citrix," chief executive Mark Templeton said.

Born in Buenos Aires to two Argentines, Iacobucci began his career at IBM back in 1979, where he worked on the company's commercial software and personal computer businesses.

He moved up the ranks to eventually lead the joint IBM-Microsoft design team responsible for OS/2, an early milestone in the evolution of personal computer operating systems that was used in automated bank teller machines, public transit ticket machines and supermarket checkout systems.

In retrospect, OS/2 sought to be "a better DOS than DOS itself, and a better Windows than Windows," technical columnist Mark Stephens wrote more than seven years ago.

The new operating system would go on to become a rapidly growing and divisive problem between IBM and Microsoft, coloring the companies' relations for more than two decades.

Way back in 1989, Iacobucci was offered a job at Microsoft as chief technical officer of its networking group. In a 2011 video, he describes his job interview with Microsoft co-founder Bill Gates.

Instead, he left IBM to raise $3 million in new capital to pursue continued development in server-based technology. The company he cofounded was named Citrix Systems.

Iacobucci took on the role of chairman, appointed Texas Instruments veteran Roger Roberts as chief executive and hired five engineers away from IBM.

The young company then took two years to develop its first product, which was called Citrix Multiuser OS/2, so named because it would work with Iacobucci's former project.

The software allowed more than one user at a time to tap into the operating system through a central server-- the very basis of how servers work in a modern LAN (local area network) today.

Just a few days before Citrix was to ship its very first product, out of the blue, Microsoft suddenly announced that it would drop OS/2 in favor of its new operating system-- Windows. That decision sent Citrix into a tailspin. Its new product was instantly rendered obsolete, but the company retrenched to make a Windows version instead.

Fueled by the widespread adoption of the personal computer in the early days, of course Citrix grew very rapidly. In 1997, Iacobucci led the company to sign a joint development agreement with Microsoft to include Citrix multi-user capabilities in its Microsoft Windows NT Server. In 2000, he then stepped down as chairman.

Totally restless in his retirement, Iacobucci co-founded DayJet Corporation in 2002 with the goal of using on demand optimization technology to further broaden the accessibility and affordability of jet travel.

Source: Oracle and Salesforce.

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