Welcome to the Cloud Wars Minute — your daily cloud news and commentary show. Each episode provides insights and perspectives around the “reimagination machine” that is the cloud.
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In today’s Cloud Wars Minute, I explore the intricacies of the Oracle and Microsoft partnership.
Highlights
00:45 — The center of my story today is Larry Ellison’s masterpiece. He’s played a huge part in converting the Microsoft relationship from being arch-rivals, competing in many areas, which they still do, to becoming close business partners. And now Microsoft — this is my interpretation — has become Oracle’s largest customer.
01:42 — As disclosed last week on Oracle’s Q2 earnings call, Microsoft has ordered 20 Oracle multi-cloud data centers to be built inside Microsoft Azure data centers. Each one of those Oracle multi-cloud data centers will include 2,000 Exadata Database Machines.
02:40 — First, Microsoft is paying Oracle for these data centers, and that’s a lot of money. Second, once those data centers are set up, Microsoft will be acting almost like a reseller for Oracle because Microsoft’s customers will be using Azure and its access to the Oracle database to buy or to consume the Oracle Database in the cloud.
03:20 — If you go back a few months, Ellison had teased about the upcoming revelation of one of the hyperscalers. He said one wanted to enter into a $1.5 billion deal for Oracle infrastructure to be used to help that hyperscaler do AI training. Shortly after, Microsoft said, “Hey, we’ve picked Oracle OCI to help us do AI training and inferencing for the Bing search engine.”
04:35 — In late October when Microsoft released its fiscal Q1 earnings, Nadella was asked “What’s behind this re-accelerated growth for Azure?” The first reason Nadella cited was that the Oracle database is now available there.
05:23 — There are many reasons why you could say that Oracle and Microsoft should continue to be arch-rivals. They have nothing in common. Yet the leaders of these two companies have found ways to do things together that neither could do individually and that drive great benefit for customers. They’ve broken the traditional rules and norms of how the tech industry goes to market, how it operates. I think that’s going to reverberate.
05:51 — Ellison’s going to turn 80 next year, and his mind, vision, and ambition seem to be as active, feisty, and disruptive as ever. Oracle, laughed at by some people just a few years ago, has found a way now to do things for Microsoft as well as, or better than, Microsoft can do them.
06:46 — So this notion of what’s possible or impossible, it’s hard to determine that now. We ought to take this example to heart and raise our notions about what is possible.
