Summary: Microsoft and Oracle established a cloud interoperability partnership that is aimed at serving the enterprise market. There clearly is a competitive angle here as well. Microsoft and Oracle are teaming up to protect their installed bases and prevent AWS from breaking into the enterprise market further.
Details: Azure and Oracle Cloud will have direct network connectivity between them. Customers will be able to run workloads in either cloud and seamlessly connect Azure and Oracle services. For example, customers can run applications like JD Edwards and PeopleSoft on Azure, while the database sits on Oracle Cloud. Or Oracle Cloud users can use Active Directory. This is just getting off the ground and the first step is a direct interconnection in Ashburn to Azure US East. Unified identity and access management via a single sign-on and automated user provisioning is enabled.
Benefits for enterprise end users: The end user gets a wider range of features and services to choose from and the flexibility to create multi-cloud deployments. Oracle Cloud users, for example, will have access to the much richer portfolio of AI and machine learning tools that Microsoft has. Once this gets built out further, Azure also has a much more extensive global infrastructure footprint.
Strategic benefits: One of the important benefits is that a multi-cloud strategy will help make it easier for the enterprise market to pull the trigger and jump to cloud. Many enterprises, needless to say, use both Oracle and Microsoft technologies and now won’t have to make an all-or-nothing bet on one of the clouds. This will reduce the need to re-architect and knock down an important barrier to cloud adoption.
Customers: Three customers planning to take advantage of the cloud interoperability are Albertsons, The Gap and Haliburton.
Angle: Oracle Cloud has struggled to make headway against its larger rivals and has struggled of late as the recent workforce reductions indicated. Partnering with Azure allows Oracle to increases its addressable market and it does the same for Azure. More services, more features and more options makes for choices and chances at uptake. From a strategic perspective, winning the enterprise market is crucial as Microsoft and Oracle need to lock this part of the cloud world down and ensure that all of the legacy infrastructure running in on-premise data centres is either migrated or connected to either one of its cloud infrastructure services. Lose it and it will be lost forever. But if it goes to the ‘other’ cloud in this partnership, it will still have a chance to get a piece of the pie and benefit. The Oracle and Microsoft clouds have always been similar in that their primary strategic objective needs to be moving the legacy world to cloud. The two have realized that they must do everything they can to make this happen – even if that means working together – because the ‘born on the cloud’ world, while in theory an opportunity, is still dominated by AWS, with Google making significant inroads. The cloud market is separating down the middle with AWS and Google on one side and Microsoft and Oracle (and IBM) on the other. The line has put the cloud market into camps and raised the stakes for locking in ‘the base’.