At the end of June, Oracle  (ORCL - Get Report) sold $14 billion worth of notes in one of the largest bond deals of the year, earmarking the proceeds for uses ranging from stock buybacks and dividends payments to acquisitions.

The funds could come in handy as Oracle tries to achieve Larry Ellison's goal of overtaking Salesforce.com  (CRM - Get Report) to become the first software-as-a-service company to $10 billion in sales. Even Ellison seemed to acknowledge in a June earnings call that beating rival Salesforce to eleven-digits in software-as-a-service sales is a reach.

Coincidentally, or not, Salesforce chairman and CEO Marc Benioff has identified passing the same threshold as "our $10 billion dream." Benioff worked at Oracle for more than a decade before founding Salesforce, and the companies frequently jab at each other during earnings calls.

"Short of a transformational acquisition by Oracle its going to be really tough for them to beat Salesforce to $10 billion in cloud revenue," said Morningstar Inc. analyst Rodney Nelson, suggesting that an acquisition like Netsuite  (N) or Workday  (WDAY - Get Report) could help, although business and personal history make the latter unlikely.

Including revenues from services, Nelson projects, Salesforce could surpass $10 billion in fiscal 2018, its next fiscal year. Counting solely software sold by subscription models, he forecasts Salesforce crossing the $10 billion mark in 2019.

Oracle now has close to $3 billion in cloud revenue, Nelson said, extrapolating from fourth quarter numbers. Even if the company hit targets to grow by 70% in the first quarter, it would be closer to $4.5 billion.

"The way we're forecasting it will about 4 years until they broach the threshold of $10 billion," he said.
Oracle's recent deals have been sub-one-billion-dollar acquisitions that beefed up its cloud offerings in an industry. In late April, the company announced the $663 million acquisition of construction software company Textura  (TXTR) , and in May Oracle said it would pay $532 million for utility software developer Opower  (OPWR) .

Oracle highlighted that it is growing faster in the cloud than Salesforce during the June earnings call. Ellison added that Salesforce lacks offerings in enterprise resource management, human capital management and other fields in which Oracle has cloud offerings. "Some of these mid-market companies can simply get an all-Oracle footprint, run their entire enterprise in the cloud on Oracle," Ellison said in June.  "That's something that Salesforce can't offer."

D.A. Davidson & Co. analyst Jack Andrews said that Ellison seemed to ascribe a low probability to Oracle beating Salesforce to $10 billion in cloud sales.

"Sure, Oracle is growing faster but it would be extraordinarily difficult to do that unless they made some significant acquisitions," he said, suggesting that additional tuck-ins are more likely than "game-changing" deals.

"They are touting the factor that as [the cloud business] gets bigger in size, its growth is increasing" he said. "I get the feeling that they want to see how this plays out."

Acquiring Workday, which has a $14.3 billion market cap, would further Oracle's cause. Such a move would harken back to Oracle's epic hostile takeover of Peoplesoft, which is one reason a deal would be difficult. While the company declined to comment, Workday's founders are Peoplesoft veterans and would be hard-pressed to sell to Ellison.

Netsuite, with a nearly $6 billion market cap, would be more digestible. The company and Oracle did not immediately respond to queries on Wednesday.

However, Morningstar's Nelson suggested noted that recent cloud deals have priced at 9 to 10 times sales.  

"If you're paying that multiple on Netsuite or Workday, it's going to be a tough pill to swallow for a lot of shareholders and its going to be tough to reap that value even though we think those are good businesses," Nelson said.