Larry Ellison, renowned for his contributions to technology, sailing, tennis, and philanthropy, has achieved a milestone in his legendary Oracle career with the transformation of Microsoft from a fierce competitor into its largest customer. In a recent revelation, Ellison disclosed that Oracle is building 20 data centers within Microsoft's Azure, meeting the surging demand for none other than the Oracle Database.
This surprising turn of events sees Microsoft, historically a competitor, becoming Oracle's major customer, paying hundreds of millions of dollars for advanced cloud services. Microsoft's colossal market cap of about $2.8 trillion, equivalent to 90% of Amazon and Google combined, underscores the magnitude of this transformation. With a projected 2024 cloud revenue of $130 billion and a global team of cloud developers and AI engineers, Microsoft, under CEO Satya Nadella, stands as a formidable force.
Despite Microsoft's significant head-start in cloud infrastructure, Ellison and Oracle have successfully positioned Oracle as a crucial partner. The multi-year agreement involves Microsoft utilizing Oracle Cloud Infrastructure (OCI) AI infrastructure alongside its Azure AI infrastructure for generative AI (GenAI) applications, providing seamless access to the Oracle Database through Azure.
Further, Ellison's recent visit to Microsoft headquarters marked a historic moment, as he and Nadella outlined their expanded multi-cloud partnership in a video interview. This partnership allows customers to leverage the Oracle Database via Azure, facilitating full access and utilization.
Oracle's fiscal-Q2 earnings announcement quoted Ellison, stating, "In the next few months, we are turning on 20 new Oracle cloud data centers collocated with and connected to Microsoft Azure." These data centers, housing over 2,000 full racks of Exadata Database Machines, respond to the pent-up demand for the Oracle Cloud database.
Ellison emphasized the customer-centric approach, stating, "Customers don't want clouds to be walled gardens." The partnership aims to offer flexibility to customers, enabling them to run the latest Oracle versions seamlessly on Microsoft Cloud and other platforms.
As Oracle and Microsoft forecast bullish growth for Oracle's cloud business, this multi-cloud partnership is poised to be a key enabler of customer migrations to the cloud. Ellison's optimism about the potential of 2,000 Exadata racks highlights the scale of opportunity for both companies.
This unexpected alliance challenges traditional industry dynamics, showcasing how strategic collaborations can redefine competition and foster innovation. As Ellison approaches his 80th year around the sun, the impact of this partnership suggests a continued disruption in the technology landscape, benefitting both Oracle and Microsoft, along with the multitude of customers poised to reap the rewards of this groundbreaking collaboration.
