Oracle and Microsoft, once fierce competitors, have formed a cloud interoperability alliance that benefits both their customers and the two vendors.
Oracle and Microsoft are committed to improving the interoperability of their respective cloud platforms and offering joint customers additional deployment options. They show how competition in the cloud can lead to unlikely alliances.

What are the benefits of this cooperation?

Companies using both companies’ products will benefit from the ability to link Azure AI services to Oracle’s autonomous database or run Oracle ERP applications on Azure with an Oracle Exadata backend.

These configurations may not appear intuitive in terms of system latency. However, the goal of the partnership is to address this through a direct link between Oracle Cloud Infrastructure’s data center in Ashburn, Virginia, and the Azure region in the eastern United States. Both companies plan to add additional regions in the future.
Other cloud interoperability measures include unified, one-time enrollment between the two clouds. In addition, Oracle Application Shops can use the Azure Active Directory for identity management, a feature available at an early preview. Companies also expect to provide a collaboration model, although little detail is currently available on how it works.

Overall, the deal appears to benefit both vendors and their mutual customers.

Companies get what they want – they can run the Oracle database in the most efficient way and do all other tasks with Azure.
Customers already had a manual process for integrating identity management. Oracle and Microsoft will now take over and support the integration. Several joint Oracle-Microsoft customers have already publicly praised the partnership.

How do companies benefit?

For Oracle and Microsoft, the partnership complements each other’s technologies and customer bases. According to Anderson, AWS poses a greater threat to Oracle at the database level than Microsoft SQL Server. Oracle’s ERP systems are primarily aimed at the medium and high performance market, while Microsoft Dynamics is popular with smaller companies.

This cooperation gives Oracle the opportunity to expand its own business. Microsoft is not a real competitor for Oracle in certain areas. Both companies want to benefit from synergy effects.

The Cloud Pact seems to represent more than pure technical investments. It is not immediately clear how Oracle and Microsoft connected their data centers. However, the former had already offered FastConnect and the latter ExpressRoute. Both offer high bandwidth connections between a customer’s local environment and the cloud.
Oracle and Microsoft are a good fit for this type of partnership because they are anchored with large enterprise customers, which AWS or Google cannot claim to be.
Microsoft Azure is following AWS in terms of anchoring in the public cloud and is growing steadily. A partnership with Oracle, another established IT provider for companies with little overlap, will definitely strengthen Microsoft’s case regarding its cloud services.

What happens next?

Whether there could be a potential interoperability pact between Oracle and Google Cloud has not yet been discussed. But one with AWS seems unlikely given the public dispute between Oracle and AWS executives. Oracle Chairman and CTO Larry Ellison said the Oracle database in the company’s cloud runs much faster than AWS – which he regularly demonstrates at Oracle Open World – while AWS boss Jassy has promoted the migration of the consumer division away from the Oracle database and positioned AWS services like Redshift as a viable alternative for Oracle database customers.

However, many major Oracle software products have been available on AWS and certified for AWS for years, albeit not as fully managed services.