Oracle Corp. and Microsoft Corp. are expanding their four-year-old cloud relationship with a deal that will colocate Oracle’s Exadata database-optimized server and Real Application Clusters in Microsoft Azure data centers.

The new offering, called Oracle Database@Azure, will give customers of both companies a low-latency option to comingle their data with Microsoft’s applications and infrastructure using the existing Azure portal, software development kits and application program interfaces.

Exadata has been hailed as a superior platform for Oracle databases, combining low-latency interconnects and intelligent storage with database-aware software optimizations. Oracle says it can achieve less than 20 microseconds of latency while processing tens of millions of operations per second across petabytes of data. The service will be deployable in multiple availability zones and in cross-region pairs to support disaster recovery scenarios.

Until now, customers have had to sign onto Oracle Cloud Infrastructure to take advantage of Exadata and shoulder the cost and time of moving data out of Azure. The new arrangement “is less cumbersome because you’re not going cross-region,” said Sid Nag, vice president in the technology and service provider group at Gartner Inc.

Under the new arrangement, they can use Oracle migration services and Microsoft Azure Consumption Commitment credits to purchase Oracle Database@Azure in the Azure Marketplace. They’ll also be able to apply Oracle Support Reward credits against Oracle license support costs.

Microsoft, which has been pouring money into artificial intelligence development, sees the deal as a way to generate more business for training on the Azure cloud.

“In order to use AI you want data and that data is in Oracle databases,” said Microsoft Chief Executive Satya Nadella (pictured left), in a joint webcast with Oracle founder, chairman and Chief Technology Officer Larry Ellison (right). “They now have the best of both worlds.”

Oracle sees the arrangement as an opportunity to accelerate its customers’ move from software licenses to cloud subscriptions. “We’re trying to hasten the process to make it easier for customers to move their entire data center workload to the cloud,” Ellison said. “That means making it easy to coexist and seamlessly manage that infrastructure in a convenient and secure way.”

Oracle also stands to benefit if Azure customers move large amounts of data to Oracle databases for AI model training. “They’re moving enormous amounts of data stored in a database to train AI models and get that done in the most efficient possible way with the data and AI model very close to each other,” Ellison said.

The two companies first partnered in 2019 on Oracle Interconnect, which provides secure, private and low-latency interconnections across 12 global regions. Left unaddressed in today’s announcement is the impact on Oracle Cloud Infrastructure, which Oracle has rapidly built into the No. 4 U.S. public cloud. Oracle is clearly leaving some OCI business on the table by sending customers to Azure. “Optically, it looks as if they’re giving up on OCI,” Nag said. “Are they going to lose any infrastructure business? That’s unknown.”

However, under the principle of “the enemy of my enemy is my friend,” the alliance against the common foe of Amazon Web Services Inc. may be worth the sacrifices.

“I think it’s really that at the end of the day,” said Gartner’s Nag. “They’ll never it say but it’s another way of dealing a blog to Amazon.” He pointed to Google LLC’s announcement of a cross-cloud network at its recent Google Cloud Next conference as a sign that other cloud vendors see multi-cloud enablement as a source of competitive differentiation.

“For a customer that is a client of both Azure and Oracle, both companies are now saying they support multicloud,” he said. “In the spirit of promoting multicloud, these providers are getting together.”

Photo: Microsoft