UPDATE: Salesforce CEO rebuts his mentor

Salesforce.com founder Marc Benioff has delivered a stinging rebuttal against his former mentor Oracle CEO Larry Ellison, accusing Ellison of distorting the definition of cloud computing to sell more boxes.

UPDATE: Ellison fires back during closing keynote - scroll to the end.

During his opening keynote at Oracle OpenWorld on Sunday, Ellison moved to cement Oracle's definition of cloud computing by saluting the Infrastructure-as-a-service (IaaS) business model of Amazon's Elastic Compute Cloud and dismissing the use of the word 'cloud' to describe the SaaS model of Salesforce.com.

Under Ellison's definition, cloud services must be virtualised, elastic (easily add more virtual machines as you need compute capacity), and sold under a business model in which you "only pay for what you use."

Ellison said Salesforce.com, by contrast, was "primarily two apps on the internet. 

"It is not virtualised. Just the opposite. Thousands of customers' data is co-mingled with other customers in the same database. There is no isolation by virtualisation. It represents weak security. It's not fault tolerant, its not secure and its not elastic.

"If you want to call this cloud computing, please do, but please understand its a very different thing to EC2," Ellison said.

Watching the presentation on video feed, Benioff had tweeted "Beware the false cloud". Amazon EC2 exec Werner Vogels agreed - re-tweeting with an additional comment: "If you have buy more hardware just to get started, it is not a cloud."

Today Benioff hosted a lunch with journalists and partners in an adjoining hotel to OpenWorld to deliver his response in full.

"You can't put a cloud in a box," he told the room. "Clouds don't go in boxes."

Benioff pointed out that Ellison's speech was a marked reversal on the Oracle chief's earlier dismissal of the use of the word 'cloud' to describe age-old network computing.

"I think he changed his keynote at the last minute to put the word elastic cloud on that box with the X on it," he said.
 
"Call them servers, don't call them clouds.

"And if you have virtualisation software, call it virtualisation software," he said. "Just don't call it a cloud."

UPDATE: Oracle chief executive Larry Ellison has given himself the last word during his closing keynote address, which repeatedly drew attention to the flaws he perceives in Salesforce.com's business model.

"The CEO of Salesforce.com got upset - he said clouds don't run in a box," Ellison said. "What does he think Salesforce.com runs on rather than a box?

"Salesforce.com runs on 1500 Dell services - which are boxes.

"This is the problem I have had with the word cloud computing. A cloud is a lot of computers on the network. I am sure when Marc [Benioff] gets back and talks to his technical people, they will let him know that you do need boxes. You really do."