This week, the almost unthinkable happened: Microsoft and Oracle have formed an agreement allowing customers to run Oracle software on Microsoft’s Server Hyper-V and Windows Azure platforms.
To summarize the technical perspective, Oracle was already certified to run on windows server, making this a move to the Hypervisor and platform level. Windows Azure also supports SQL server Database, Oracles own database and its WebLogic middleware. And finally Oracle has certified Java to run on both HyperV (the Microsoft Hypervisor) and Windows Azure (its PaaS offering).
But big questions remain as to each of these company’s motives in creating such a surprising alliance. And who stands to benefit most?
Down to brass tacks
If I were a strategist at Oracle, and sat down to figure out where my next round of competition was coming from, the answer would overwhelmingly be: From just about every angle. Perhaps this is what has made Wall Street so nervous about Oracle, giving its shares a tap on the head.
Despite Larry Ellison’s long standing opposition to all other technology competitors, an Oracle strategist may recognize that having at least one strategic partner in the mix might be better than trying to beat out the entire world of converging infrastructure and application platforms in the cloud frontier – a place where Ellison has lagged his peers. One would have to say that all things considered, and perhaps by order of elimination, Microsoft really has not been a thorn in Oracle’s side (to date, anyway).
Likewise for Microsoft, whose suite of products are each facing their own highs (Xbox) and lows (server and tools), there is increasing rivalry on the business productivity front and operating system frontiers with all of the growth among the cloud providers. But how does Microsoft get past the fact that it is seemingly selling its soul to Linux products (now supporting Oracle Linux flavor!) as well as Java-based products (remember Sun’s lawsuit against Microsoft?) – ones that have competed so directly with its bread and butter operating systems, including its 64-Bit version of MS SQL and .Net platform?
When the fish you hooked becomes shark bait
Turning the tables, and placing myself into the confines of a Microsoft strategist, there is a paradoxical trend being revealed at Microsoft that requires a new way of thinking. The top line revenue and margins that once aligned against OS numbers are now being spawned from the very applications that have always been largely seen as bait for its underlying database and OS.
And therein lies the rub for Microsoft: having customers pay for any of its datacenter services, regardless of the underlying software being used, is a way to beat out its rivals. And those same rivals are irritating our Oracle strategist from all of the Cloud layers: at the infrastructure layers (namely IBM, HP, AWS, Cisco, EMC, Fujitsu), at the PaaS layer (VMware, Red Hat and Google), as well as at the SaaS layer (Workday, SAP and even foe-/friend Salesforce.com).
Is Oracle getting anxious to try new things?
This week, Oracle also announced an alliance with NetSuite, as well as plans to integrate salesforce.com with Oracle’s Fusion HCM. The good news is that Ellison has recognized the power of business productivity apps as the fastest-growing segment of the cloud. The less-good-to-poor news is that he is hitching his ride to the leading business app providers with his lips more than his arms.
Perhaps, though, there is something more at play with the Microsoft relationship. When Microsoft first announced its launch of Azure, it did so with the promise to not undermine its partner service providers, and also with the goal of making good on its software and services mantra. In other words: Mr. Developer, if you get used to the tools you like using in Azure, you can yank your code back into your datacenter and deploy the same applications there – as long as you’re still using our underlying operating system.
The Azure cloud platform was largely seen as a means to an end at the outset. Perhaps that’s how Oracle would like to view it, given how much of its infrastructure resides behind the firewall in the private datacenter. As we have seen from Hosted 365 and numerous other hosted Microsoft applications, however, that may not be the overriding strategy anymore (see Shark Bait discussion above). With the growing wave of SaaS and other hosted apps, it would take a brave man to bet against the tide.
Are we really still seeing battle done at the IaaS/Hypervisor layer?
Many people theorize that this new Microsoft-Oracle relationship is squarely focused at VMware. Oracle has begrudgingly supported VMware’s hypervisor in the past, but has never certified itself to VMware. As a result, customers could not easily access support when issues arose and often migrated away from VMWare and toward Oracle’s own services. As for Microsoft, Oracle may help it finally close that gap at the top end of the market where it has never done particularly well against VMware with its HyperV platform.
With that in mind there remains little doubt that this is a defensive, and self-serving, relationship for both companies. It remains to be seen how persistent and deep the relationship becomes – perhaps, only as far as co-competitor VMware is willing to react to it. And both companies stand to benefit from the interoperability and support of each other’s customer bases.
The real question for consumers now is who is going to be offering the support services for these cloudy offerings? Ironically IaaS leader AWS has been offering Oracle 11g database, Windows, SQL and even ICM DB2 instances on its infrastructure, with little in the form of support services for a while now. All this in full-view of the traditional tech behemoths jostling for outright leadership in the cloud space.