Oracle and Microsoft extend the multicloud relationship

Catalyst

The greater use of cloud has been built on customers selecting a single dominant public cloud provider and extending that to a hybrid on-premises deployment. This approach provides organizations with a flexible solution that meets the needs of balancing off-premises and on-premises resources yet combining them to become one effective shared pool of resources. By contrast the multicloud evolution is more synonymous with the silos, or islands, of resources that organizations are trying to move away from. However, customers can see the benefit of a multicloud strategy if the cloud providers work to their strengths and enable low latency connectivity between clouds. 

Oracle and Microsoft break the mould of multicloud 

Two of the big cloud hyperscalers, Microsoft and Oracle, have jointly announced an extension to the cloud interoperability alliance that enables customers to deploy mission-critical enterprise workloads that span their respective Microsoft Azure and Oracle Cloud Infrastructure environments. From a customer perspective, this reflects the increasing move towards a multicloud approach, enabling enterprises to access best-of-breed capabilities in the cloud that are best suited to the needs of complex business applications. From a technology perspective, Microsoft and Oracle have addressed the key issues of interoperability including direct interconnect between their clouds, integrated identity management, and a collaborative support agreement.

From a market perspective, the ‘co-opetition’ agreement acknowledges the needs and preferences of joint customers. Oracle recognizes that its cloud strategy will be best served by focusing on its strengths, including its autonomous database and its cloud application portfolio, rather than competing head on with the hyper-scale cloud providers. For Microsoft, the agreement increases the scope of its cloud partnership arrangements, enables access to the significant Oracle database market, and provides increased choice for the large number of joint Microsoft and Oracle customers.

Oracle and Microsoft announce an Oracle Database service for Azure

Omdia’s IT Enterprise Insights survey 2021/22 indicates that as cloud strategies mature, organizations are moving more of their mission-critical core systems, including ERP, CRM, and databases to the cloud. The ‘elephant in the room’ is that many customers use Oracle for its reliable database services and Microsoft for its business applications and analytics services. This implies customers often face a compromise by selecting one cloud provider to perform both activities when they move these core workloads to the cloud. The Oracle-Microsoft announcement is designed specifically to address this issue by enabling customers to retain their existing cloud of choice for the different elements of the core business systems by providing a low latency (sub 2ms) Oracle Database service for Azure.

This service will enable Oracle applications (including Oracle E-Business Suite, Oracle Retail, PeopleSoft, Hyperion, and JD Edwards), custom applications, and new cloud native applications running on Azure, accessing Oracle databases (i.e., Oracle RAC, Exadata and Autonomous DB) on Oracle Cloud Infrastructure (OCI). It will also enable these applications to take advantage of the Azure services ecosystem, including Artificial Intelligence (AI), Internet of Things (IoT), and cloud-native development offerings such as Azure Kubernetes Services and Azure Functions. The key to enabling a seamless deployment for these scenarios is the direct private connect between OCI and Azure between 11 Azure and OCI regions. 

In addition, there is federated identity between the two clouds (and on-premises Microsoft Active Directory) to provide a unified Single Sign-On (SSO) experience. Oracle has also made its management portal look more ‘Microsoft-like’ so that Azure admins are comfortable using the service. Another key aspect Omdia considers worthy of note is the multicloud observability that this partnership supports. The Oracle data plane automatically exports observability data into the customers Azure subscription, so they have a consolidated view of their infrastructure needs in Azure.

Customer demand will drive service evolution and future partnerships

The alliance between Oracle and Microsoft targets a sweet spot in the market, with Azure’s strength in enterprise cloud and Oracle’s predominance in database representing a substantial customer overlap. Omdia believes that the availability of the combined service will appeal to a large number of customers, particularly SAP applications that must migrate to a cloud version by 2027 (SAP will provide mainstream maintenance for SAP Business Suite 7 core applications until end of 2027). A similar arrangement between Oracle and AWS is unlikely, given the degree of fierce competition between them in the cloud database arena, but a comparable partnership with Google would make strategic sense. Oracle has also established a strong proposition in the private cloud market with its Cloud@Customer offering, and there could be a compelling case for delivering similar interoperability for customers in highly regulated industries that don’t want to put their databases into a public cloud. Whichever the particular deployment scenario, this announcement offers welcome choice for Oracle’s and Microsoft’s customers and works to significantly reduce the many challenges of multicloud integration.