Who Are the Real Winners in the Microsoft-Oracle Deal?

The new Microsoft-Oracle partnership benefits both companies, as Oracle gets access to Azure and Microsoft can finally license Java. Will the deal have any effect on either company's enterprise customers?

By Paul Rubens
Thu, August 15, 2013

CIO — Microsoft and Oracle announced a wide-ranging partnership deal in late June. At first glance, the logic behind it was fairly baffling.

The agreement lets Oracle customers run its software—including Java, Oracle Database and WebLogic Server—on Microsoft's Hyper-V hypervisor, in its Azure cloud or on Windows Server. The Oracle software will be certified to run on Microsoft platforms, meaning both companies will work to fix any problems that might arise.

Microsoft-Oracle Partnership

Microsoft, for its part, will offer a fully licensed version of Java, as well as development tools and Oracle Linux in Azure.

The deal was difficult to understand because the two companies compete in the enterprise database marketplace. Why would Microsoft welcome Oracle's database into its Azure cloud to compete with its own SQL Azure? And why would Oracle want to undermine its own Oracle Cloud by encouraging Microsoft to offer Oracle software on Azure?

Oracle Needs to Put Its Head in Public Cloud

To get to grips with what's going on, it's important to understand that Oracle Cloud is weak and getting weaker by the month, says James Staten, a principal analyst at Forrester Research. "The company's public cloud offering has really had very little success, so Oracle really needs to find another way to get its software into the cloud."

Amazon already resells Oracle technologies on its Amazon Web Services cloud platform, so it makes sense to look at Azure as well, Staten says.

"Oracle can't just stop at Amazon. Azure is the No. 2 public cloud and it is growing, so it is absolutely in Oracle's interest to get its technology onto it," he points out, adding that Oracle can still say that its technologies run best on Oracle Cloud to preserve its dignity.

Ellison: Ellison: Oracle Will Deliver World's 'Most Comprehensive Cloud'

Holger Mueller, principal analyst at Constellation Research, agrees that Oracle's motivation for the deal is to make its technology available beyond its own public cloud offering. "Oracle is getting its database onto the public cloud provider of the future," he says. "This is a major coup, as now Google is the only major public cloud that doesn't support Oracle."

Microsoft Needs Java (Hold the Cream and Sugar)

What does Microsoft get out of the deal? Mueller believes Redmond has been very keen to get access to Java. "Amazon's AWS cloud gets developer support because it offers Java, and Microsoft is desperate to do the same," he says. "It wants to become the No. 1 IaaS vendor, but if it has no support for Java, then that becomes almost impossible."

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