Three things Oracle has done to become a big cloud player

New database and partnership with Microsoft, Salesforce mean Oracle's ready to play in cloud industry

Oracle had a busy couple of weeks at the end of June, rolling out a new version of its database software and announcing partnerships with Microsoft, and NetSuite. In doing so the company – who’s CEO Larry Ellison at one time bemoaned cloud computing – has almost overnight become a major player in the industry. Here's why.

The moves are not just significant for Oracle; the partnerships that the company has garnered are significant to the partnering with Microsoft and Salesforce, too. And they’ll also reverberate across the industry to competing companies such as Amazon Web Services and SAP, predicts Holger Mueller, vice president at Constellation Research who recently published a report about these developments. “The bottom line: Oracle technology will play a fundamental role accelerating cloud adoption,” he writes.

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During the last week of June, Oracle announced Oracle Database 12c with a built-in multi-tenant architecture geared specifically for running cloud workloads; the “c” stands for cloud. The day before it had announced a partnership with Microsoft in which Oracle DB will now support Windows Hyper-V virtualization platform, marking the first time Oracle has supported another hypervisor. Microsoft also announced that its Azure cloud platform will support Oracle Linux, Java and databases.

Later that week Oracle and announced a partnership that would include Salesforce using Oracle servers and databases as the hardware platform for its market-leading SaaS cloud offering. In return, Salesforce will integrate Oracle’s cloud-based human capital management (HCM) and Enterprise Resource Planning (ERP) programs into its cloud-based offering. NetSuite also announced that Oracle HCM will be available on its platform.

The Microsoft-Oracle partnership is important for both companies and marks strategic shifts, Mueller points out. Microsoft is enabling full-stack support for Oracle products in its cloud, providing an alternative platform compared to its in-house SQL Server offerings in its cloud. By doing so, Azure can now run Java applications, and Microsoft cloud customers have additional database choices. The other side of the coin is that Microsoft applications will now be compatible on Oracle databases.

For Microsoft, Mueller contends it provides a significant advance for its Azure platform, which is looking to compete with Amazon Web Service’s market-leading IaaS. “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’s and Oracle’s customers and partners,” Mueller says.

The Salesforce-Oracle news is somewhat of a surprise given the public feuding between Ellison and Salesforce CEO Marc Benioff over the years. Salesforce committing to use Oracle hardware and pursuing a go-to-market offering with enterprise applications adjacent to its customer relationship management tool is something many watching the industry likely would not have expected to see. In doing so, however, Salesforce automatically adds not just CRM specialty, but it now has HCM and ERP capabilities. That’s a fuller product portfolio that it can go up against rivals like SAP with. The and Oracle partnership proves that if two companies have a common competitor, such as SAP, they can find ways to work together.

All these announcements are not just big deals for the companies involved but their competitors too. SAP now has stiffer competition and its HANA in-memory database is not getting as much love from partners in the past few weeks compared to Oracle. just became a more legitimate cross-application competition for SAP’s enterprise apps as well.

Microsoft is making its moves in an effort to bolster its cloud credentials against Amazon Web Services. Rolling out support for major enterprise tools such as Oracle databases and Java will help the company make the argument that its cloud is the more enterprise-ready.

And for Oracle, the news makes a complete 180-degree turn from where it was just a few years ago. Ellison used to disparage cloud computing, calling it just marketing. Now, his company is a heavy hitter in not just powering clouds, but being an arms dealer to some of the biggest vendors in the industry.

But, while the moves are important for Oracle, Microsoft and Salesforce, Mueller warns that it’s not all gravy for Ellison moving forward. SAP still has a superior in-memory database with its HANA offering, and Oracle has done little to address the growing NoSQL trend in database management. “Both challenges will need an Oracle response in the near future,” Mueller says.

Network World senior writer Brandon Butler covers cloud computing and social collaboration. He can be reached at and found on Twitter at @BButlerNWW.

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Copyright © 2013 IDG Communications, Inc.