Microsoft, Oracle link up in the cloud for an 'interoperability' play — and a dig at AWS

Dive Brief:

Microsoft and Oracle are connecting cloud services, allowing customers to run parts of the same workload in each cloud, the companies announced Wednesday.
In a "best of both clouds" approach, the deal bridges the gap between services allowing Oracle's autonomous database to connect with Azure analytics and artificial intelligence, for example. The companies want to help joint customers move enterprise applications and databases to the public cloud, said Scott Guthrie, EVP of the cloud and AI group at Microsoft, in the announcement.
The partnership offers single sign-on and allows for the deployment of custom or packaged applications from Microsoft or Oracle to run in respective clouds. To make it work, Microsoft and Oracle directly interconnected datacenters in Ashburn, Virginia and Azure U.S. East, with plans to add more regions in the future, according to the announcement.

Dive Insight:

The word of the day: "interoperability."

Two technology kings coming together creates easy pathways for joint customers to shift to the cloud. Microsoft is all in on the hybrid cloud, meeting customers where they are in actual cloud adoption. (If what I hear from companies is true, there is still a long cloud adoption road ahead).

The news comes as cloud services have struggled to take off at Oracle. As Business Insider reports, the company has undergone recent cloud layoffs and there is internal confusion over strategy.

The vendor has improved cloud services since its debut, but Oracle needed focus on its partner ecosystem, Gartner said in the 2018 IaaS Magic Quadrant.

By working with Microsoft, Oracle leverages the database services it is known for and Microsoft's expansive customer base. More than 95% of Fortune 500 customers use Azure, according to Guthrie. That kind of exposure is a boost for Oracle's cloud penetration.

The deal also comes off as a warning to Amazon Web Services. Oracle and Microsoft are well known — and well adopted — vendors. Their cooperation spells trouble for vendors taking a siloed approach to the cloud.

And there's a historical tension there: Oracle and AWS are not exactly fans of each other's services. Larry Ellison, chairman and CTO of Oracle, said there is no way a "normal person" would move from an Oracle to Amazon database.

That's not to say AWS doesn't have high-powered partnerships. Like Microsoft, Amazon also works closely with business application leader SAP. The key difference with Oracle is the direct, physical links it now has to Microsoft data centers.