With New Alliance, Oracle and Microsoft Reveal Long Game Strategy
When Oracle and Microsoft announced their cloud interoperability partnership on June 5, two realities immediately became clear.
- First, looking to the past, the so-called “database wars” that once pitted Oracle’s Relational Database Management System (RDBMS) versus Microsoft’s SQL Server are basically over. Starting with the release of SQL Server 2008, the two companies have gone toe to toe, releasing new functionality and features to enable enterprises to better manage their applications and the underlying database systems. This alliance is an admission by each vendor that, in today’s hybrid cloud world, they’re not the diametrically opposed rivals they used to be.
- Second, looking to the future, the alliance reveals a great deal about their divergent paths, and where each company is placing its long term bets.
Microsoft, under Satya Nadella’s leadership, has simply innovated and pivoted to the cloud faster than Oracle, developing cloud-native database technology like crazy. Microsoft was making its cloud bet early, starting over and building its technology cloud-first, while Oracle, like other database management system vendors, continued to offer its on-premise technology hosted in the cloud. Some experts initially questioned Microsoft’s cloud-first approach, noting that Microsoft’s and Oracle’s platforms were not equal and cloud migration often required enterprises to rearchitect their environments.
But it’s now obvious that Microsoft’s long-game strategy was strong, especially with the emergence of hybrid cloud, and the dovetailing of on-premise and cloud-based architecture. Oracle has not kept pace, losing cloud market share to both Microsoft and Amazon.
If you need further evidence of Microsoft’s cloud innovation prowess, look at Azure database services— there is as much choice as any enterprise could wish for. Want to host your enterprise SQL Server apps in the cloud? Microsoft has SQL Server on VMs. Want a fully managed relational database? There are three different Azure-based SQL flavors.
Microsoft now offers the superior platform for the foreseeable future, which will be increasingly dominated by the hybrid cloud approach. Microsoft’s platform is tightly coupled with artificial intelligence and machine learning that offers cloud-based and cloud-connected workloads access to superior data intelligence capabilities at lower costs and via more common skill-sets.
Additionally, Microsoft continues to focus on application development and IT infrastructure. They continue to win the hearts and minds of the software developer with tools like Visual Studio, Azure Data Studio and the C# programming language and .NET framework. They make it easy for the application developer to choose the Microsoft-native databases because it is a natural extension for them. The promise of Oracle’s autonomous technology based on machine learning and self-tuning is years, if not decades, away from reality.
Where Do They Go From Here?
Along with AWS, Microsoft is well-entrenched with Azure as the cloud platform and cloud infrastructure of choice for the enterprise.
Oracle is becoming more of an enterprise application software company. Companies run their businesses on Oracle, but many would prefer running those applications on Azure, along with all of their custom applications.
Additionally, this alliance also signifies a maturity in the cloud market. Technology infrastructure is not self-contained. It is complex and multi-tiered. It is shortsighted for a cloud vendor to seek to win all software assets within a company, especially large enterprise customers. If cloud vendors force customers to make painful, unnecessary platform changes because that software asset only runs on the vendors’ platform, they might lose those customers to entirely new competitors.
Oracle and Microsoft have both won and protected market-share for decades by choosing to compete at each technology tier and integrate with or cooperate with competing technologies. The latest battlefront is the public cloud. This is an alliance of necessity. Cooperation is needed to protect established existing customers and market share.
What Do IT Leaders Need to Know?
Enterprise IT leaders and CIOs should be concerned about the future of Oracle as a pure database vendor. The Oracle enterprise applications will continue to run on the Oracle DBMS) but Microsoft is emerging as the data platform of choice for start-up Independent Software Vendors (ISVs) as well as all internally built IT applications.
IT leaders can feel very confident that moving to Azure is a winning cloud strategy. Enterprises have the freedom to buy applications like NetSuite and Peoplesoft without worrying if they are going to have to move to the Oracle Cloud when they migrate from Infrastructure as a Service (IaaS) to Platform as a Service (PaaS).
Sometimes, cooperation, rather than competition, benefits the customer. In the case of Oracle and Microsoft joining their clouds, enterprises will now have considerably more choice and flexibility. That means a lot in today’s cloud-dominated world.
As CEO, Bob is focused on accelerated global growth for SentryOne, both organically and through acquisitions. Here he provides valuable updates on key company milestones and future strategic priorities. Check back often to read Bob's insights that offer a glimpse of SentryOne beyond the technology.