Salesforce's cofounder says he was initially shocked when the company became more valuable than Oracle: 'That's definitely a milestone'

• As of July, Salesforce was a more valuable company than its archrival Oracle, with a $179 billion market cap vs Oracle's of $176 billion.
• Salesforce cofounder Parker Harris took a moment to reflect on that achievement during a virtual event hosted by Piper Sandler.
• He said it felt like a "milestone" and recalled the company's early startup days decades ago working in Benioff's apartment when a $400 million value seemed like a lot.

Salesforce crossed a milestone this month when it became more valuable than its archrival Oracle. On Friday, Salesforce's market cap was $179 billion whereas Oracle's was at $176 billion.

So, the moment feels like a milestone, Salesforce Parker Harris told Piper Sandler's Brent Bracelin during the "It's Friday: State of the Cloud" virtual event.

Harris recalled those early startup days in 1999 when he, Salesforce CEO Marc Benioff, and two other early employees were working out of Benioff's San Francisco apartment and famously getting turned down by VCs. It was just after Microsoft bought Hotmail for $400 million, and the two of them thought that a $400 million exit was "pretty cool," Harris remembers.

But even back then, Benioff, ever the big-vision guy, told Harris that "we're going to be much bigger than that," according to a transcript of the interview shared by CNBC's Jordan Novet.

This month, it happened. "Our valuation was bigger than that of Oracle and that was a bit of a shock for me. I was like, 'Wow! That's definitely a milestone," Harris said.

It's not just that investors seem to be more excited about Salesforce's future, at the moment, than Oracle's. It's that the two companies have a long, intertwined — and often cantankerous — history.

The idea for Salesforce, and the software-as-a-service business model it pioneered, actually came from a meeting with Oracle founder Larry Ellison back when Salesforce founder Marc Benioff was still working at Oracle and Ellison was his mentor.

Benioff left Oracle with Ellison's blessing and about $2 million of his money. About a year later, Oracle launched a competitor and Benioff kicked Ellison off Salesforce's board. The two companies have been heated rivals ever since.

These days, the shoe is on the other foot. While Oracle still dwarfs Salesforce in overall revenues ($39 billion for Oracle for fiscal 2019 vs.$17 billion for Salesforce in its fiscal 2019) and profits (99 cents earnings for share for Oracle; 15 cents EPS for Salesforce), when it comes to the most critical market, cloud computing, Oracle is the underdog, coming from behind and playing catch up to giants like Amazon Web Services, Microsoft and Salesforce.

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