Oracle vs Salesforce

Larry Ellison co-founded Oracle in 1977, naming it after a CIA database project he had worked on. Ellison had dropped out of two universities without completing a degree. He was 33 when he founded the company with Bob Miner and Ed Oates, investing $2,000 of his own money. His original goal was to build a relational database based on a paper published by IBM researcher Edgar Codd — a paper IBM itself had no plans to commercialise. The irony that the company named after a CIA project would end up housing the world's most powerful AI infrastructure was still decades away.

Oracle went public in 1986 and grew explosively. By 1990, it was the second largest software company in the world after Microsoft. Then the company was forced to restate earnings after sales staff had been booking revenue from contracts customers had not yet signed. The stock fell 80%. Oracle nearly went bankrupt. Ellison later said it was the moment he learned that a company's culture reflects its leader.

Oracle launched a hostile takeover bid for rival PeopleSoft in 2003 — an 18-month battle during which PeopleSoft's CEO publicly called Ellison a "sociopath." Oracle eventually prevailed for $10.3 billion. It was the beginning of an acquisition machine: over 100 companies bought in the following decade, workforces cut, software integrated into Oracle's sales engine. The strategy made Oracle dominant in enterprise software and deeply unpopular with the companies it absorbed.

Oracle signed one of the most consequential deals in its history in 2025: a partnership with OpenAI as the anchor cloud provider for the Stargate project — a $500 billion AI infrastructure initiative backed by SoftBank. Oracle committed to building data centres at a scale previously associated only with nation-states: over 5 gigawatts of AI capacity, running more than 2 million chips. Oracle's remaining performance obligations — contracted future revenue — surged 438% year-over-year to $523 billion. By June 2026, full-year cloud revenue was $34 billion, growing 39%.

Oracle reported record fiscal year 2026 results in June 2026: total revenue of $67.4 billion, up 17%, with cloud infrastructure revenue growing 77% to $18.1 billion. CEO Safra Catz projected OCI — Oracle Cloud Infrastructure — would hit $144 billion by 2030. Larry Ellison, then 81, had personally negotiated the Stargate deal and was briefly the second-richest person in the world when Oracle's stock surged 36% in a single day following the Q1 2026 earnings announcement. The database company that had been called a legacy software giant was now the primary landlord of the AI revolution.

Marc Benioff founded Salesforce in a rented apartment in San Francisco in 1999 with a radical idea: software should not be installed on company servers — it should be delivered over the internet and accessed through a browser. The concept — Software as a Service (SaaS) — was not new theoretically, but nobody had built a major enterprise software company around it. Benioff's former employer, Oracle's Larry Ellison, invested in Salesforce. Benioff later joked that Ellison had funded the company that would cannibilise Oracle's business model.

Salesforce hired actors to stand outside a Siebel Systems user conference in 2000 carrying protest signs reading "The End of Software." The stunt generated press coverage that no advertising budget could have bought. Siebel Systems was the dominant CRM software company at the time. The guerrilla marketing campaign established Salesforce's identity as an irreverent disruptor and was one of the most effective B2B marketing stunts in technology history.

Salesforce went public in June 2004 at $11 per share. The company subsequently launched the AppExchange in 2005 — a marketplace for third-party applications built on the Salesforce platform. The AppExchange transformed Salesforce from a CRM company into a platform business: the more applications were built on Salesforce, the more valuable the platform became to customers, and the harder it was to leave.

Salesforce acquired Slack — the workplace messaging platform — for $27.7 billion in July 2021, the largest acquisition in Salesforce's history. The deal was driven by the desire to create a competitor to Microsoft Teams, which had grown dramatically during the COVID-19 pandemic. The acquisition was controversial: Microsoft was effectively giving Teams away to its Office 365 customers. Slack founder Stewart Butterfield left within two years of the acquisition.

Salesforce reported revenues of $34.9 billion for fiscal year 2024, making it one of the largest enterprise software companies in the world. Following pressure from activist investors Elliott Management and Starboard Value in 2023, Salesforce cut 10% of its workforce and dramatically improved profitability — operating income rose 80% in a single year. The company subsequently pivoted to AI with "Agentforce" — an AI agent platform designed to automate sales, service, and marketing workflows. By late 2025, Salesforce was signing large Agentforce deals and positioning the platform as the AI layer for enterprise CRM. The company that had invented SaaS was now racing to define the next generation: AI agents running on top of SaaS.