Jun 27, 2013

    Rivals join hands to reach for the cloud

    MICROSOFT'S cloud-computing service will offer Oracle's database and Java tools as an option, as the companies cast aside a longstanding rivalry to attract businesses moving their software online.

    Microsoft will offer businesses using its Windows Azure service the ability to run Oracle's widely-used database software, application-connecting middleware and Java programming tools, Microsoft chief executive Steve Ballmer and Oracle co-president Mark Hurd said during a conference call to unveil the alliance.

    The executives said customers are demanding that more of the companies' products work in tandem as they create Web services that incorporate offerings from both.

    "It's about time, and we're really glad to have the chance to work in this much newer and more constructive way with Oracle," Mr Ballmer said. "The partnership has an immediate benefit to customers of every size and shape."

    Both companies are facing competition from nimbler rivals delivering computing power over the Internet, including Google and

    Microsoft is seeking new sources of revenue from online services as demand for personal computers slumps, and Oracle is shifting its focus to business software sold through online subscriptions rather than installed on customers' computer servers.

    The collaboration would woo customers seeking more technical compatibility between products of the two companies.

    Oracle plans to support versions of its software that customers run through the online Azure service and when using Microsoft's Hyper-V virtualisation software, which lets servers run more efficiently, Mr Hurd said.

    It will also let customers use their current software licences on Azure, he said.

    Oracle's database, which will be upgraded this year and called 12c, competes with Microsoft's SQL Server. Companies using Microsoft's Azure cloud service, which lets companies build and run programs online, will be able to put information into Oracle's database.

    The alliance with Microsoft lets Oracle offer its customers the option of sticking with its database and middleware at a time when businesses are moving more of their software to cloud-computing services.

    Azure's main competitor is Amazon Web Services, in a growing area called infrastructure as a service, which lets companies rent computing power, storage and database software via the Internet.

    That's the fastest-growing part of the cloud market, according to Gartner, which estimated that sales in the market segment will surge by an average of 38 per cent annually to US$30.6 billion (S$38.9 billion) by 2017, from US$6.17 billion last year.

    Microsoft, which said in April that revenue from Azure and related software sales topped US$1 billion annually, has pledged to match Amazon Web Services' prices.

    "This deal gives Microsoft clear competitive advantages against two of its top rivals," Mr James Staten, an analyst at Forrester Research, said in a blog post.

    It bolsters Microsoft's efforts to compete with VMware, the market leader in virtualisation software, and "gives Windows Azure near-equal position against Amazon Web Services in the cloud-platform wars", he said.

    Oracle will also make its version of the open-source Linux operating system available through Azure.

    "The cloud is the tipping point that made this happen," Mr Hurd said. "This made a lot of sense for both of us."