Strange Bedfellows: Microsoft and Oracle Eye Cloud Pact

Microsoft CEO Steve Ballmer, Server and Tools President Satya Nadella and Oracle President Mark Hurd will gather for a press teleconference Monday to announce a cloud partnership.

During last night's quarterly earnings call with analysts, Oracle CEO Larry Ellison strategically alluded to the forthcoming partnership with Microsoft to support its next-generation database, 12c. The Microsoft deal is one of several partnerships Oracle is inking in the coming days. Others include with the likes of Salesforce.com and NetSuite, Ellison said.

Ellison indicated the companies will support 12c -- its new cloud-based, multi-tenant database. The "c" stands for cloud, Ellison said. It's reminiscent of the company's use of the letter "i" when it introduced its Internet database Oracle 8i in 1999. It's unclear whether it will follow the company's historical nomenclature, which would be Oracle 12c. But given its MySQL assets and the move toward NoSQL repositories, anything is possible. In his remarks on the earnings call, Ellison described 12c as "the most important technology we've ever developed for this new generation of cloud security."

Given Nadella's planned presence on the call, it's not a stretch to presume the pact will involve supporting Windows Azure and/or Microsoft's so-called Cloud OS stack, which includes the combination of Windows Server and System Center. While there's no love-lost between Microsoft and Oracle, they've largely stayed out of each other's hair these days.

Such an arrangement is certainly not without precedent. Even when their rivalry was more pronounced, Oracle made its flagship products available for Windows Server, even though the company tends to push Linux -- and in fact typically the first releases of new products these days always come out on Linux (followed by Windows at some later point).

Despite a chilly relationship of convenience between Microsoft and Oracle, Ellison has saved his ire for IBM, Salesforce.com and, of course, Hurd's former employer HP. The latter company and Oracle became acrimonious following the hiring of Hurd at Oracle and the company's push into the server market with the acquisition of Sun Microsystems. And of course let's not forget Oracle's decision to stop supporting HP's Itanium-based servers. Also, I have heard little to suggest the longstanding animosity between Oracle and SAP has subsided.

Even though Oracle and Microsoft compete in the database market as well as in on-premise and software-as-a-service (SaaS) applications, they've both carved out their own niches -- and neither is hurting, though they do face increased competition from startups and a slew of alternative big data and NoSQL technologies. And the Java versus .NET rivalry has become more moot these days. Nevertheless, Oracle and Microsoft aren't companies you expect to see on a stage together -- or on a conference call.

It's worth noting that Ellison himself isn't scheduled to be on the Microsoft-Oracle call, though he could decide to parachute in. But he used last night's earnings call with analysts to provide a glimpse of what's coming.

 "Next week we will be announcing technology partnerships with the most important, the largest and most important SaaS companies and infrastructure companies in the cloud," Ellison said. "They will be using our technology -- committing to our technology for years to come. These partnerships I think will reshape the cloud and reshape the perception of Oracle technology in the cloud."

While some reports have suggested Ellison let next week's announcement slip, clearly he planned to articulate that Oracle will be launching its new cloud database and partnerships to support it next week. Invites to the conference call arrived from Microsoft less than two hours after the call. It appears Microsoft didn't expect anyone from Oracle to tip the company's hand last night.

However meaningful the partnerships Oracle has planned for next week, Ellison accomplished one thing -- providing a distraction from the fact that Oracle missed analyst estimates again for its most recent quarter by $250 million. Revenues of $10.95 billion for the quarter were flat. Will this new partnership with Microsoft be the same? We'll have a better idea next week.

Posted by Jeffrey Schwartz on 06/21/2013 at 1:15 PM