Oracle Embracing the Broader Cloud Landscape

It's easy to accuse Oracle of trying to lock up its customers, as nearly all its marketing focuses on how Oracle on Oracle (on Oracle) delivers the best everything, but today Ellison's company and Microsoft signed a joint partnership that empowers customer choice and ultimately will improve Oracle's relevance in the cloud world. 

The Redwood Shores, California software giant signed a key partnership with Microsoft that endorses Oracle on Hyper-V and Windows Azure, which included not just bring-your-own licenses but pay-per-use pricing options. The deal came as part of a Java licensing agreement by Microsoft for Windows Azure, which should help Redmond increase the appeal of its public cloud to a broader developer audience. Forrester's Forrsights Developer Survey Q1 2013 shows that Java and .Net are the #2 and #3 languages used by cloud developers (HTML/Javascript is #1). The Java license does not extend to Microsoft's other products, BTW. 

This deal gives Microsoft clear competitive advantages against two of its top rivals as well. It strengthens Hyper-V against VMware vSphere,as Oracle software is only supported on OracleVM and Hyper-V today. It gives Windows Azure near equal position against Amazon Web Services (AWS) in the cloud platform wars, as the fully licensed support covers all Oracle software (customers bring their own licenses), and pay-per-use licenses will be resold by Microsoft for WebLogic Server, Oracle Linux, and the Oracle database. AWS has a similar support relationship with Oracle and resells the middleware, database, and Oracle Enterprise Manager, plus offers RDS for Oracle, a managed database service.  

Bring your own license terms aren't ideal in the per-hour world of cloud platforms, so the pay-per-use licensing arrangements are key to Oracle's cloud relevance. While this licensing model is limited today, it opens the door to a more holistic move by Oracle down the line. Certainly Oracle would prefer that customers build and deploy their own Fusion applications on the Oracle Public Cloud, but the company is wisely acknowledging the market momentum behind AWS and Windows Azure and ensuring Oracle presence where its customers are going. These moves are also necessary to combat the widespread use of open source alternatives to Oracle's middleware and database products on these new deployment platforms. 

While we can all argue about Oracle's statements made in last week's quarterly earnings call about being the biggest cloud company or having $1B in cloud revenue, it is clearly no longer up for debate as to whether Oracle is embracing the move to cloud. The company is clearly making key moves to cloud-enable its portfolio. Combine today's moves with its SaaS acquisitions, investments in cloud companies and its own platform as a service, and the picture clearly emerges of a company moving aggressively into cloud.  

I guess CEO Ellison no longer feels cloud is yesterday's business as usual.


BI implications

really curious to see how this'll affect Oracle and Microsoft relationship as direct BI competitors.

Oracle DOES support its software on VMware


It's not correct that Oracle only supports its software on Oracle VM and Hyper-V hypervisors. Oracle has supported their products on VMware vSphere for several years and their policy is documented in Metalink/MOS article 249212.1.

Now "certification" is a different topic, but our customers are successfully running Oracle on VMware and getting support from Oracle.


May not address underlying problem

While adoption of pay for use could be a big move in business model, and interoperability and ease of use between the two ecosystems should be attractive to many developers and customers, it won't necessarily move the needle on the challenges facing the companies unless of course there is a third, fourth, and/or fifth moving gear hidden from view.

The challenge as I see it is that the collective mass of the enterprise ecosystem is simply too large for the customer and demand base--including physical affordability, relative to emerging choices. We'll see what Steve B has up his sleeves-- it does sound like more than the previous moving of chairs around the office this time--and needs to be, but from my seat including on receiving end of a lot of resumes from incumbents, this is a good start--but challenge is deeper, broader and permanent.

One can't compare these two well, nor do they compare to IBM, SAP or others in many respects, but one thing they all have in common is a very different world emerging than the one any of these execs grew up in--economically and/or technically. At the end of the day--which may be sooner than many think, I think it will require a net downsizing of headcount in enterprise IT-- internally at many customers, externally in vendors, middlemen and influencers.

Regardless of what Wall St., egos, management teams, partners, or even at times customers may prefer, sometimes physics trumps even in the mature enterprise IT industry. In such cases like we now face, voluntarily cannibalizing can be a much smarter move, which this partnership may in part represent--we'll see.

Often is the case when corp cultures have "done it this way" for so long that when faced with a dramatically changing environment, rather than altering course in a rational manner to deal with the real challenge, they just hunker down and do more of what they know well. I think we may have seen this in IBM and Oracle in the past few quarters when they saw sales challenges as a need for a bigger and more efficient sales hammer. That isn't the reality I see or hear, including from some of their own people and customers (with all due respect- significant).

While this may not be what many want to hear, please don't shoot the messenger--that's how it looks from my perch. - MM

PS: Harsh perhaps, but interesting: Oracle's Power of Prophecy Fades