Oracle and Microsoft Azure: Who's winning, who's lagging, six months on

The Oracle-Azure combination hits the half-year mark, and the real-world benefits and uses for customers are finally taking shape

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Back in March, Microsoft and Oracle surprised many people by announcing that several key Oracle software products would be available on Azure -- a tie-up that at the time seemed as plausible as the proverbial flight of pigs.

Though they remain rivals, the companies complement each other in ways that have proven beneficial to customers. Oracle remains largely hidebound by an old-school business model of monetizing existing licenses and has become a cloud company only in the sense of creating cloud versions of existing applications that mainly appeal to current clients -- and few others.

Microsoft, on the other hand, has added one broadly appealing feature after another to Azure -- not merely hosted versions of Microsoft staples like SQL Server, but cutting-edge products like Hadoop and its own NoSQL DocumentDB. In doing so, Microsoft has wisely given Oracle customers (who are often also Microsoft customers) a connection to the rest of Microsoft's world.

How have Microsoft-and-Oracle customers fared in the six months since the union? For perspective, I reached out to Microsoft's Azure team with questions about Azure customers making use of Oracle products. (All replies were credited to Ryan McGee, Sr. Product Manager at Microsoft.)

InfoWorld: On balance, what are most Oracle customers running on Azure -- which applications, which services? That is, are they simply using basics like Oracle Database, or are they running full-blown, upmarket Oracle apps?
Microsoft: Oracle software — including Java, Oracle Database, and Oracle WebLogic Server on Azure. For many customers, database and middleware are where the conversation starts. But we're hearing increasingly that they are looking to move their higher-level Oracle apps next.
InfoWorld: Are [Azure customers] by and large bringing their own licenses, or are they buying anew? (Oracle customers can elect to port their own licenses if they use Oracle products on Azure.)
Microsoft: There is definitely a mix. For short-term projects, development environments, testing, and so on, we see a fair amount of uptake on our license-included VM images. For longer-term usage cases, customers often are redeploying licenses they already own.
InfoWorld: Do you believe at least some of the reason for customers transitioning to Oracle on Azure is as a preliminary step to transition away from Oracle entirely? Or does it seem like the customers in question are committed to Oracle and simply want a more flexible operating environment?​
Microsoft: Flexibility is important to customers. They need a path to the cloud on their terms. Azure is an open platform that gives customers the flexibility they need to easily move their apps to the cloud. Demand is incredibly strong too: 57 percent of the Fortune 500 are using [Azure], so customers have a great choice with Azure that is enterprise-grade and fully supported today.

There's little question that more flexibility is better when dealing with a possible migration away from Oracle. EnterpriseDB (vendor of PostgreSQL, a common open source alternative to Oracle's database products) has noted that such migrations are less about technical issues and more about cost containment. If existing Oracle customers are interested in moving more of their Oracle infrastructure to Azure, it makes sense to see the shift as part of a larger cost-containment process.

Oracle's software revenues have gone up year over year for more than a decade now, but the portion of the money derived from new licenses has shrunk. The company has all but surrendered to Microsoft one of the best ways it could entice new customers: Provide software through a cloud service that's easy to consume and widely compatible with other business products. If Oracle has done this out of a misguided sense that the cloud is everyone else's business, it only proves the company has left much of its own future on the table.

Copyright © 2014 IDG Communications, Inc.