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Microsoft is the big winner in new Oracle cloud partnership

Microsoft and Oracle formed an unlikely--but logical--partnership to deliver cloud services, which benefits Microsoft, Oracle, and customers

Microsoft and Oracle are working together? Oh, wait. I guess that should be a statement instead of a question. The two companies have joined forces in a new cloud venture. It seems Larry Ellison has embraced the wisdom of that ancient Arabic proverb "the enemy of my enemy is my friend."

The nuts and bolts of the deal are that Microsoft and Oracle are teaming up to deliver Oracle software via Microsoft's cloud platform, Azure. Azure customers will be able to run Java, Oracle Database, Oracle WebLogic Server, and even Oracle Linux on Windows Server Hyper-V or Windows Azure, and Oracle will deliver full certification and support.

It's a dramatic reversal for Oracle, to put it mildly. Oracle founder and CEO Larry Ellison has been on a one-man quest to crush Microsoft for years. It's always seemed a bit Quixotic, though, because Oracle isn't in the same league and has never come close to achieving Ellison's goal.

So, why this partnership? Why now? In a nutshell, it just makes sense for both parties. It's a win-win move that benefits Microsoft and Oracle; one positions both companies to compete more aggressively with their respective rivals.

Rob Enderle, principal analyst with Enderle Group, told me the marriage isn't as far-fetched as it might seem. "Microsoft really had no issues working with Oracle--or Sun for that matter," said Enderle. "it was the CEOs from both companies that decided they wanted to try to put Microsoft out of business."

Enderle said that both companies have bigger fish to fry, and that the rank and file at Oracle have already been working closely with Microsoft for some time. Despite Ellison's goal to destroy Microsoft, the reality is that Oracle can't deliver for its customers without engaging amicably with Microsoft on some level.

Wes Miller, an analyst with Directions on Microsoft, believes Microsoft's Azure platform and Oracle are both winners in the short term. Over the long term, Microsoft wins and VMware loses as a result of the Microsoft-Oracle partnership. "Microsoft gains additional customers for Azure," said Miller. "Oracle gains customers who use or want to use their technology, but want to do so in the cloud."

As much as Ellison might want to best Microsoft, doing so would bite the hand that feeds him. Oracle makes software, and that software needs a platform to run on. Many of Oracle's customers run Oracle software on Windows Server.

Al Hilwa, an IDC analyst, rationalized, "Since Azure now essentially runs virtual machines and provides Infrastructure-as-a-Service, it is effectively a cloud operating system. It only makes sense to see other popular technologies that need an operating system run on Azure."

Hilwa added that he hopes this is just the opening salvo from Microsoft and Oracle. Ultimately, Hilwa thinks the two companies should partner at a deeper level and introduce added-value services that reduce the friction of migrating to the cloud and minimize IT costs for customers.

This new relationship between Microsoft and Oracle is good for all. Rivalries aside, many Microsoft customers rely on Oracle software, and many Oracle customers rely on the Windows operating system. Joining forces to ensure everything works smoothly in the cloud is the right thing to do for customers.


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