Microsoft’s and Oracle’s recently announced cloud interoperability alliance will enable customers to deploy mission-critical enterprise workloads that span their respective Microsoft Azure and Oracle Cloud environments. From a customer perspective, this reflects the increasing move toward 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.
While Oracle intends to continue competing with the hyperscale cloud providers, it recognizes that its cloud strategy will be best served by focusing on its strengths, including its autonomous database and its cloud application portfolio, particularly in the predominant multicloud environment. 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.
Microsoft and Oracle will still be competitors in the cloud market, but the agreement is a recognition that each has a specific skill set, or capability, and that enabling these to be delivered in a coherent and connected manner will provide significant value to customers with a multicloud strategy. Ovum believes that for customers considering the move of core mission-critical workloads, the ability to combine the deep technical knowledge and performance that OCI delivers for data management with Microsoft Azure's rich portfolio of cloud services enables customers to secure the performance, automation, and resilience needed to move enterprise workloads to the cloud. The range of platform services, business productivity, and collaboration capabilities that Microsoft Azure supports helps the customer make the transition to a familiar cloud environment and enables the wider benefits offered by the Azure ecosystem.
For Oracle, there is an underlying acknowledgment that Microsoft has a larger cloud platform footprint with strong penetration in the enterprise market, including of course its Office applications. Oracle, on the other hand, has a strong position in the database market and a compelling portfolio of business applications, and its autonomous database capabilities are market leading. Many enterprise customers choose to run their enterprise applications, test, dev, and custom workloads in the same cloud, and there is a greater propensity to select a hyperscale cloud provider such as Microsoft for these workloads. However, if customers can get a direct connection to Oracle Autonomous Database running in the Oracle Cloud, that gives enterprises the best of both worlds – a fully managed Oracle database and the customer's preferred platform for enterprise workloads with the associated performance, latency, and security benefits provided by direct private connectivity between the two.
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