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This morning, Microsoft and Oracle announced a new partnership between their respective cloud platforms. The partnership between these two enterprise providers should garner great interest by enterprises large and small. Most, if not all, Fortune 500 companies are already customers of both Oracle and Microsoft. Microsoft claims that 95% of the Fortune 500 already use Microsoft’s Azure cloud service.

The reality is that many enterprises already use Oracle solutions along with Microsoft solutions but in a disjoined way. They may use Oracle DB on Oracle Cloud, but AI, IoT or Kubernetes in Microsoft Azure.

While no new product offerings were announced, let’s break down what was announced and how it impacts enterprises.

THE CORE PARTNERSHIP

The core announcement is a seamless experience for customers working with the Oracle Cloud and Microsoft Azure products. To do that, the companies have joined forces to connect their cloud solutions.

The companies drilled home the point of the partnership is to create a seamless experience for customers. For example, active directory now integrates seamlessly into Oracle cloud. Or a customer could run Oracle applications on Azure while the database remains with Oracle Cloud. The partnership now brings a more cohesive experience to the customer.

Beyond the technology itself, each company is training their teams on networking, active directory and other integration points. They have gone so far as to offer customers the ability to call either Oracle or Microsoft for support.

DIVING INTO TECHNOLOGY

Connecting cloud services requires a high bandwidth, low latency connection between the clouds. Speed of light limitation require that data centers are physically located close to one another. The first location to connect is their respective Ashburn/ US East locations and the connection between the two data centers makes them look like one construct. While other locations are being evaluated, no specifics were announced.

ANALYSIS AND PROJECTION

The partnership is a great thing for enterprise customers. It connects two of the most widely used platforms together in a more seamless way. The first iteration of supported services is certain to have limitations, but the fact that these two companies are joining forces in this way is significant. There are still some questions that may be asked:

Support for a single location

The partnership with only one location is huge by itself. However, there will be hesitancy by enterprises to leverage the connection for more mission-critical applications due to a lack of redundancy. Single points of failure present an inherent risk and the risk only increases with the criticality of the application. Adding a second location will unlock the demand that is hesitant to work with a single location. The companies mentioned that they are already looking at locations where their respective data centers are physically close to one another.

Co-locating services in a single data center

But what happens when they need to provide services in a geography where their respective data centers are not physically close to one another? Could one company offer their footprint in the other company’s data center. For example, what if Oracle moved their footprint into an Azure data center? It would not be the first time something like this has occurred. I suspect this could be an outcome down the road as the partnership expands and takes off.

Looking beyond Azure

Oracle and Microsoft have a huge overlap in customers and therefore is a great place to start. Could Oracle expand their partnership to include Amazon’s AWS or Google Cloud? Possibly, but the overlap in enterprise customers would not be as significant. Plus, creating continuity and a seamless experience between Oracle and 3, 4 or 5 cloud providers would prove challenging.

In summary, the partnership is a great improvement for enterprise customers to reduce the friction they are already feeling. Let see how it plays out for both companies in the near term.

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