News Analysis: Oracle’s Cloud Strategy - Revisionist History or Cloud Genius?
This is a joint post with my colleague Holger Mueller who looks at IaaS/PaaS and Future of Work technologies for Constellation Research.
At a press conference on June 24th, 2013 with Microsoft’s CEO, Steve Ballmer, and Oracle’s President Mark Hurd announced a cloud partnership where Azure customers will be able to run Oracle Database (no version mentioned, but Constellation expects this to be 12c), Oracle Weblogic, and Java.
Oracle also announced availability of Oracle Linux for Azure customers. Constellation believes that the deployments of the Oracle 12c, Weblogic and Java stack pieces will be deployed on Oracle’s Linux. Should this be true, the approach makes sense, as this is a tested and proven hardware and software combination. Further, Microsoft has already begun to run parts of Azure on Linux.
The partnership alliance poses significant implications for both vendors and more importantly customers moving to the cloud for three reasons:
- Java comes to Azure, a sign of pax in the .NET vs Java wars. For Applications to run on Azure, they needed to be built in CLR generating programming languages. Now, with the licensing of Java by Microsoft as part of this partnership, Java applications will run on Azure. This opens doors for Java applications on the Azure cloud, as well as general more portability for Java applications. And Azure becomes a friendly cloud for the 9 million+ Java developers out there.
Point Of View: Microsoft and Oracle strike a win-win here. Microsoft gains more language derived potential for expanding Azure and Oracle adds a marquee cloud stack to support Java. Given the substantial overlap of enterprise customers on both Microsoft and Oracle, customers will benefit from more cross cloud compatibility for Java while supporting Azure for IaaS.
- Azure will run Oracle Weblogic and the Oracle Database. Microsoft will support Oracle Linux in Azure as the foundation to run the middleware and the database stack. Though the press release and the press conference did not specify which Oracle database, Constellation speculates this is for Oracle Database 12c. In addition, Oracle announced license mobility for customers who want to run software on Azure and bring Oracle Linux to Azure..
(POV): Interesting enough when Larry Ellison spilled the news for this announcement during the Q4 Oracle earnings call, this was not about the Oracle Database, but very specifically about Oracle 12c. It’s not clear why 12c is not specifically referenced in the press release – but with the ORacle 12c general availability slotted for June 25h, 2013, this moment may not have been the time to steal the thunder. Of note, it is not only the database, but also the Weblogic application server which will be deployed on Azure. This comes as a surprise at first, but given the work Oracle has done to integrate the former BEA flagship product with 12c and Java – it was a question of taking whole technology building and avoiding too many interfaces. Why run Java apps through Biztalk to an Oracle database? Constellation views this as a smart move by both companies, as it allows Azure customers to utilize more of the Oracle products, that are more and more entwined due to the Fusion and Exaxxx products.
- The hypervisor is where Microsoft and Oracle draw a line in the sand. Oracle will support Microsoft’s hypervisor Hyper-V to be the demarcation line between higher level application code and the Oracle products that now run in Azure. The combined offering will be running on Hyper-V, which creates some headaches for Oracle on the hypervisor level as Constellation predicted, and will be supported by Oracle support as running on Windows Azure. .
(POV): This poses some engineering work for the Oracle hypervisor teams, but nothing impossible to achieve. And the benefits are tangible, Hyper-V built applications will now be able to run on the Oracle Database (12c, and on Oracle Linux). This will give a lot of performance critical (think Dynamics) applications that were limited by SQL Server scalability before, new breathing room. Microsoft was able to protect higher level applications of its technology stack with this agreement and at the same time Oracle benefits from a whole ecosystem of Hyper-V compatible applications. The cost of supporting Hyper-V for Oracle, which is tangible, is however dwarfed by this additional market potential. And it gives Mircosoft an important leg up against VMware’s vSphere. Constellation believes this has significant implications in the cloud stack wars among Amazon, Google, HP, IBM, and VMware. In unusual candidness for these Oracle listed the current and future deliverables for the alliance in an blog post here.
Why did this happen?
As previously mentioned, this would have been a very good April Fool’s headline – even back on April 1st 2013. So this alliance comes as a surprise pretty much to all industry observers, at least we have not seen anyone claiming to see this one coming.
Constellation can only speculate what has driven Oracle and Microsoft to become frenemies and co-opitors. But the usual drivers are customers and technology. Customers could be the biggest driver for this alliance (e.g. a large public sector client that has standardized on Azure but requires Oracle, maybe for security or scalability reasons). Why? Oracle has achieved significant and game changing elasticity through the de-coupling of metadata and user storage in Oracle 12c. In the due diligence process Microsoft must have looked at this design point and it must have been clear, that SQL Server would not be able to match this. It will be interesting to see in the months to come, what the real drivers to this alliance have been.
Lastly it necessary to mention that primarily Microsoft, but to a certain point also Oracle are interested in differentiating their cloud offering versus Amazon’s AWS and Google’s GCE. And this alliance certainly helps in this process.
Implications for the market
Over the past decade, Oracle has emerged as the laggard in the cloud market. VC’s had advised their startups not to build on Oracle to avoid the cost overhead and legacy database technology. Yet Larry Ellison remains the rare master of Sun Tzu’s Art of War strategies. In this latest effort, he shows his determination to serve as the arms dealer for cloud infrastructure. Announcements on partnerships with Amazon, Dell, now Microsoft and soon with Salesforce.com and NetSuite show his determination to remain relevant in the cloud, albeit very late to the party.
The irony is that it all comes back to the original view of Ellson – that the cloud is nothing else than servers connected to the internet. And to a certain point that is what the Oracle Linux machines with running Oracle 12c, WebLogic and Java will do. Only they will be more elastic than other commercial database offerings, but we will have to see what happens on more detail at the 12c announcement tomorrow.
For the overall cloud market this forms a positive development as amongst the dedicated cloud stack vendors – AWS, Google, Microsoft and Oracle – this forms a level of reuse and commonality that previously has not been thought to be possible. Java applications now run on all of the four aforementioned cloud stacks. The Oracle database runs in all but Google. As does Oracle Linux (we assume that’s also how AWS deploys Oracle). So we are not at all at a time of interoperability – but this alliance is certainly propelling the cloud further in these terms.
The Bottom Line: The Irony is the Database Back Again?
At the end of the day two veterans of the enterprise software industry, Hasso Plattner and Larry Ellison are re-inventing their companies through database innovations. It looks like enterprises still want and need to store data reliably and efficiently. May it be in memory with HANA or may it be with better overall elasticity for 12c. No mention of cloud. Remarkably both innovations would have been beneficial for their respective companies even in a pre cloud era. So yes, the database is back. And with that a chance to rebuild and re-invent the whole enterprise technology stack upwards.
Our POV: The Cloud Wars Have Just Begun, Customers Poised To Win
This is the positive announcement expected over the weekend. The cloud sure makes strange bedfellows, and is the real driver and winner. Both Messrs. Nadella and Hurd clearly identified that. With the addition of Java to the overall mix, more interoperability has been achieved than customers would have expected and overall this is good news for the cloud, and more importantly, for Microsoft and Oracle’s customers and partners.
Before customers can rejoice, availability, pricing and customer successes must come first.
Ready for the Microsoft – Oracle Alliance? Will you run Oracle in Azure? Are you waiting for SQL Azure? Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.
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