Oracle Corp. announced Wednesday that it has secured acloud-computing alliance with Microsoft Corp., an acknowledgmentthat the database giant's go-it-alone approach to the cloud wasn'tworking.

|

The software makers will connect their data centers so thatmutual customers can more easily use cloud services from bothcompanies, said Redwood City, California-based Oracle in astatement. Clients can run applications on Microsoft's Azure cloudthat are tethered to databases on Oracle Cloud. A single login willlet customers access either system, the companies said.

|

The move by Oracle is bigger than the technical details maysuggest. At Microsoft and elsewhere in the cloud landscape, broadpartnerships are a common way to fuel demand by letting clientsconnect critical systems built by different vendors. That strategyhas helped Microsoft thrive as the No. 2 provider of computingpower and storage (behind Amazon Web Services, or AWS), as morecompanies move their data to the cloud. But that hasn't beenOracle's way. The company, led by Chairman Larry Ellison, haslimited tie-ups with Microsoft and other rivals—and its revenue hascontracted for the last two quarters.

|

Oracle's decision also is a defensive maneuver meant to preservethe company's lucrative database business and make its softwareapplications more attractive to companies interested in moving moreof their information technology needs to cloud services likeMicrosoft's Azure.

|

“With this partnership, our joint customers can migrate theirentire set of existing applications to the cloud without having tore-architect anything, preserving the large investments they havealready made,” Don Johnson, the executive vice president of OracleCloud Infrastructure, said in the statement.

|

The accord will be far tighter than what Oracle has with othercloud players, Mark Moerdler, an analyst at Sanford C. Bernstein& Co., wrote Wednesday in a note.

|

The deal “should add value to both companies,” Moerdler wrote.“As both companies work to drive their customer base to the cloud,this should simplify the process of migrating workloads.”

|

The world's top software companies, No. 1 Microsoft and No. 2Oracle, have a complicated history. They compete in the databasemarket, where Oracle leads. Each company also makes software formanaging customer relationships, but both are bested bySalesforce.com in that space.

|

Ellison said in 2017 that his company had “a huge technologylead” in the cloud compared with Microsoft—a statement belied byMicrosoft's cloud revenue advantage and market share, both then andnow.

|

Oracle has tried for years to get some of its 430,000 customersto move to the company's cloud infrastructure for computing anddata-storage needs, even revamping the offering with a “generationtwo” service built by an entirely new team. The effort still hasn'tpaid off, with Oracle maintaining a small share of theinfrastructure market.

|

The company avoided large partnerships in part because of itsdo-it-all approach to IT. Oracle's sprawling product lineupincludes servers, databases, programming language, and softwarethat manages accounting, marketing, supply chains, and humanresources.

|

Former Oracle President of Product Thomas Kurian had proposed toEllison that Oracle should collaborate with cloud rivals such asMicrosoft and AWS, Bloomberg News reported in September. Ellisonwasn't keen on the idea at the time, people familiar with thematter said then. Kurian left the company and is now the CEO of thecloud platform run by Alphabet Inc.'s Google.

|

 

|

Copyright 2019 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.