The partnership, which was jointly announced by Microsoft CEO Steve Ballmer and Oracle president Mark Hurd, will see Oracle certify and support Oracle Database, Oracle WebLogic Server, Java, Oracle Linux and Oracle applications on Windows Server Hyper-V and Windows Azure. Oracle's software already runs on Windows Server in hundreds of thousands of on-premises deployments, but the partnership extends that capability to Microsoft's cloud. It's a step Ballmer described as crucial to customers of both companies.
"Today's announcement is a great example of partnering to deliver what our enterprise customers need ... greater choice and flexibility in how they deploy software," Ballmer said. "For most enterprise customers, the solution isn't only a public cloud or a private cloud; the solution is orchestrating hybrid clouds in support of business needs."
In contrast to cloud pure-play vendors, like Salesforce.com and Workday, which focus exclusively on delivering public cloud services and platforms, Microsoft and Oracle have both made hybrid deployment a cornerstone of their cloud strategies.
[ Want more on the motivations to partner? Read Oracle Makes Big Promises After Weak Earnings. ]
Companies that rely on multiple vendors, multiple data centers, multiple applications and a growing number of connected devices "need a broad enterprise cloud ecosystem for the orchestration of hybrid clouds," Ballmer said.
Oracle has its own hybrid cloud platform, but Hurd said support for Microsoft's cloud would be good for customers and, therefore, good for Oracle.
"If more people get more access to our IP, we look at that as favorable," Hurd said. "To see these clouds working together in a thoughtful way for customers is going to be nothing but good."
Hurd said Oracle support for Window Server Hyper-V and Windows Azure is effective immediately, as is license mobility, enabling Oracle customers to move their software onto Azure. In addition, Microsoft will be able to offer Azure-based Oracle Database and Oracle WebLogic services to customers that have not yet licensed those products.
Microsoft had a head start in the cloud compared to Oracle, with Ballmer having gone "all in" on cloud in early 2010. Oracle announced the Oracle Cloud platform in late 2011. Partnership with Microsoft gives Oracle access to the scale of Azure, reported to have in the high tens of thousands of customers, and the broad appeal of Windows, which is the dominant operating system for enterprise servers.
Last week Oracle reported a second straight quarter of disappointing software sales, with many analysts seeing inroads by cloud computing vendors as sapping new license growth. Windows Server Hyper-V and Azure give Oracle new options for virtualized private-cloud and public-cloud deployment.
The appeal for Microsoft is getting the Oracle stack, Oracle applications and Oracle licensed and supported Java on Azure. (Microsoft previously used the Open Java Development Kit to support Java on Azure, but it said Oracle licensing made it a "first class" development option.) All of the above will help Microsoft scale up its cloud.
"This is a good announcement for both companies as it gives Azure more capabilities and Oracle more exposure to different hypervisors with the support of Hyper-V," said Holger Mueller, VP and principal analyst at Constellation Research, in a statement about the alliance. "We will have to see how well applications built for the pure Microsoft Azure stack will run on the half red and half blue stack."
Microsoft and Oracle are by no means backing away from competition in the database and applications arenas. Microsoft SQL Server squares off against Oracle Database and Oracle MySQL while Microsoft Dynamics ERP and CRM applications compete against multiple Oracle counterparts. But the partnership is a pragmatic acceptance that both companies need more deployment options if they are to grow their respective cloud businesses.
"In the world of cloud computing, behind-the-scenes collaboration is not enough," said Ballmer, alluding to the work Oracle and Microsoft have long done behind the scenes to enable Oracle Database and Oracle applications to run on Windows Server. "People wanted more from us, people wanted more from Oracle ... and in the cloud you have to do that kind of partnership actively, not passively."