Microsoft and Oracle headquarters
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At the beginning of July, Microsoft and Oracle announced that they were creating a cloud interoperability partnership enabling customers to migrate and run mission-critical enterprise workloads across Microsoft Azure and Oracle Cloud. The companies said this means enterprises will be able to seamlessly connect Azure services, like Analytics and AI, to Oracle Cloud services, like Autonomous Database.

By enabling customers to run one part of a workload within Azure and another part of the same workload within the Oracle Cloud, the partnership offers enterprises a highly optimized, best-of-both-clouds experience. Taken together, the partnership provides a one-stop shop of cloud services and applications for businesses.

It’s not the only cloud partnership that has been announced in recent weeks and months. Taken together, they all add up to fundamental changes in the cloud space and, ultimately, the way organizations work. We will be taking a deeper dive into the cloud space soon, but with Microsoft and Oracle now together at least in this respect, understanding this partnership is a good indication of future moves and trends.

Microsoft’s Long Cloud-Play

Douglas McDowell, chief strategy officer for SentryOne, which offers software to help Microsoft data professionals better manage their Microsoft data platform, said that the partnership is a clear indication that the cloud market has reached maturity. He pointed out that technology infrastructure is not self-contained, it is complex and multi-tiered. It is shortsighted for a cloud vendor to seek to win all assets within a company, especially large enterprise customers.

If cloud vendors force customers to make painful, unnecessary platform changes, they might lose those customers to entirely new competitors. Oracle and Microsoft have won and protected market-share for decades by choosing to compete at each technology tier and integrate with or surround competing technologies. “The latest battlefront is the public cloud. This is an alliance of necessity; cooperation to protect established market share,” he said.

Microsoft made a huge cloud bet at the outset. When all other established database management software vendors simply hosted their on-premises tech in their cloud, Microsoft chose to start over and build their tech cloud-first. This initially cost Microsoft as the platforms were not entirely equal and cloud migration often required re-architecture. “But the long-game strategy is strong and now that on-premises and cloud architecture has dovetailed, Microsoft offers the superior platform for the upcoming years;” he added.

Of course this platform is tightly coupled with AI and machine learning that permits cloud-based and cloud-connected workloads access to superior data intelligence capabilities at lower costs and via more common skill sets.

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Moving Relationships to the Cloud

Oracle and Microsoft are coming together to create a cloud-based version of a relationship that Oracle has built on-premises for a long time. Oracle has always been the default enterprise database of choice, said Hyoun Park, CEO and principal analyst at Amalgam Insights.

As Oracle moves to the cloud and brings its Autonomous Database with it, Oracle wants to make it easier for customers using Microsoft’s business intelligence and AI services to work with Oracle. This is an admission on Oracle’s part that it is better to get half a loaf of enterprise services than none as they build out Oracle Cloud and start making a serious enterprise push.

On Microsoft’s side, this partnership represents a continued willingness to partner with any and all market leaders and to make it easier for Microsoft clients to work with their client of choice. This is especially true for emerging services such as Azure Machine Learning, where Microsoft (and its competitors) are all racing for initial market share in a market that is not fully shaped yet. “The keys here are around the direct interconnect capability in US East, deployment of custom applications and packaged Oracle applications in Azure, and the joint support team,” he said. “The direct interconnect capability, currently limited to North America, gives enterprises a plug-and-play solution for disaster recovery and to split up workloads across multiple clouds based on the enterprise’s preference.”

Fundamentally, this agreement makes it easier for enterprises to either have a backup cloud if they are starting with Azure or Oracle or to split up workloads to give specific developer teams their cloud of choice, as data architects, application developers and enterprise architects may all have their specific preferences.

By having a joint offering, Oracle and Microsoft have the opportunity to remove a lot of the nitty-gritty work of service orders, service mapping, networking, data transfer, governance and business continuity work that would otherwise be necessary to manage application stacks across workloads.

Related Article: Microsoft With Oracle: Welcome to the Hybrid, Multi-Cloud World

Benefiting from the Hybrid Cloud

Matt Baird, co-founder and CTO of AtScale, a data warehouse virtualization company, pointed out that to secure and ultimately reap rewards from the hybrid cloud that this kind of partnership encourages, companies will need to make a bigger commitment to “automate all the things.” Not only infrastructure as code, but security as code too, avoiding a manual process when you can build automation. Automation will provide repeatability and the ability to share and verify — all of which will lead to making it easier to pass security audits, especially in this new more complex world. “Being able to seamlessly move workloads may sound like nirvana, however, companies will have to become much more facile with their regulatory concerns,” he said.

One of the biggest challenges comes not from any one regulation, but from the fact that many companies are still manually checking to see that they are compliant and meeting custom or regulatory security baselines for security compliance and auditing requirements. “Oracle and Microsoft together do not know your business and may be able to provide some tech/guidance. However, there is a lot of work required. It's a tedious, complex, and error-prone process to begin with, but it becomes even more so when dealing with a mix of heterogeneous systems in the cloud and on premises,” he said.

When configuration changes are made manually, many times these changes may go undetected, so processes are not repeatable, sharable and reproducible — all "musts" if you are planning on passing a security audit.

As a final thought, a blog post about the partnership from Mark Bowker, a senior analyst at independent research firm ESG, pointed out that this is also about ensuring market share for both companies in the coming years. “The partnership was likely led by senior executive leadership teams that realized both companies can create new growth trajectories in a market that is experiencing rapid change as it has been placing some of the IT vendor community back on its heels. Now was the time to strike,” he wrote. The market at the moment is characterized by four issues:

  1. The two most mentioned difficult aspects of adopting public cloud are preparing for application migration and building the business use case (31%) and redesigning and moving applications to the cloud (29%).
  2. According to an ESG survey, 76% of organizations are evaluating, planning or have already begun initial implementations of hybrid clouds.
  3. The most important business objectives of hybrid cloud strategies comes down to running application services on-premises while providing end-users with the same ability to provision resources from a public cloud provider.
  4. The most important hybrid cloud considerations are seamless compatibility with on-premises infrastructure (51%) and support for application development environments and tools (35%).

Bowker argues that Microsoft and Oracle have the potential to combine efforts and meet customer requirements on all of the above. Microsoft provides the cloud muscle while Oracle pulls in enterprise expertise. And perhaps most importantly, business can move forward without having to re-architect applications. This, however, is only the beginning.