Top execs at longtime rivals Microsoft and Oracle explain why they just came out of nowhere with a new cloud partnership: 'This is the start of a beautiful friendship'

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Microsoft Executive VP Scott Guthrie

• Microsoft and Oracle signed a surprise agreement that sees the longtime rival work together to make their Microsoft Azure and Oracle Cloud platforms interoperable.
• That means developers can have software that runs from Microsoft Azure, but which connects to the Oracle Cloud to use its cutting-edge Autonomous Database technology.
• Microsoft Executive VP Scott Guthrie and Oracle Executive VP Don Johnson say that while the companies do often compete, there are lots of customers out there who already use some combination of both their products - and making their lives easier is mutually beneficial.
• "This is the start of a beautiful friendship," Oracle's Johnson told Business Insider.
  
• Read more on the Business Insider homepage.

Microsoft and Oracle haven't always seen eye to eye - if absolutely nothing else, the two tech titans compete in the lucrative database market, where Oracle reigns supreme.

So it comes as a surprise that on Wednesday, the two are expected to announce a cloud computing team-up between the Microsoft Azure and Oracle Cloud platforms.

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In short, the partnership will allow applications hosted on one cloud to use services hosted on the other, in any combination that the customer chooses. For example, a developer could run the bulk of their app on Microsoft Azure, and then hook it up to Oracle's next-generation Autonomous Database, which is only available via the Oracle Cloud.

"This is the start of a beautiful friendship," Don Johnson, executive VP of Oracle Cloud Infrastructure (OCI), tells Business Insider.

Scott Guthrie, executive VP of Microsoft's cloud and AI group, says that while Oracle may be a competitor in some ways, it's actually in the interest of both companies to work together here.

Many customers, especially large enterprises, are already using tech from both Microsoft and Oracle in some combination, Guthrie notes. Indeed, this joint solution is already being piloted by the Albertsons grocery company, oilfield mega-conglomerate Halliburton, and clothing retailer Gap Inc.

What this partnership accomplishes, Guthrie says, is to make life easier for those customers. And that makes it more likely that they'll purchase even more cloud services from Microsoft and Oracle. He says that Microsoft Azure has already seen some success with a similar playbook by embracing integrations with sometimes-rivals likestorage company NetAppor virtualization giant VMware - giving those customers options didn't cannibalize Microsoft's own products, he says.

"It's not substitutive [sic] with our solutions," says Guthrie.

Oracle

Oracle Executive VP Don Johnson

Similarly, Oracle's Johnson believes the partnership will open up new capabilities for Oracle. There are customers out there who run key Oracle software, like its E-Business Suite, on Microsoft Azure - but who also want to take advantage of new Oracle tech like the Autonomous Database. The Microsoft partnership means that a customer can use Oracle software running in Microsoft Azure, connected to an Oracle database running in the Oracle Cloud. Again, says Johnson, it's good for both parties.

The executives also highlight the technical wizardry that goes into making this work. Johnson says that there's a "big fat pipe" of dedicated bandwidth between the two companies' platforms to make sure latency stays low and performance stays high. The two have also worked together on identity and security, to make sure that a developer's data stays safe as it travels between Microsoft's data centers and Oracle's.

This partnership comes as both companies face ever-increasing competitive pressure from Amazon Web Services, the retailer's massively profitable IT services arm, which is the clear leader in the cloud computing market. Indeed, Oracle founder Larry Ellison has positioned the Oracle Autonomous Database as a major weapon against Amazon, even as Microsoft continuously redoubles its efforts to catch up to first place.

However, the executives say that this partnership was born not of any kind of rivalry, but rather, a desire to better serve customers. Indeed, says Guthrie, it was that customer focus that drove the two to work together in the first place.

"When you put customers at the center," says Guthrie, "it makes the conversation really easy."

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