Cloud rivals Microsoft and Oracle have set up a direct network link between their respective cloud platforms that allows enterprises to connect their workloads between the two cloud providers. The partnership takes advantage of Oracle’s embedded enterprise focus with the larger scale of Microsoft’s Azure platform.

The move provides interoperability for workloads running across the respective cloud operations. For example, an enterprise can connect Microsoft Azure services like analytics and artificial intelligence (AI) to Oracle Cloud’s services like its Autonomous Database. This means those customers can run different parts of their workloads in those different cloud environments simultaneously.

Oracle, for example, cited the ability to run its E-Business Suite, PeopleSoft, Oracle Retail, Hyperion, and JD Edwards Enterprise One platforms on Azure while allowing customers to continue accessing an Oracle database in its cloud platform. Microsoft Azure customers, conversely, would be able to run those Oracle features in a more familiar environment.

“The customers that we’ve talked to about these multi-cloud configurations are eager to get access to this capability,” explained Vinay Shivagange Chandrashekar, vice president of product management at Oracle, in a blog post.

Customers can access the interconnectivity through a unified, single sign-on. Both cloud providers will maintain their own customer maintenance and management contracts.

The direct interconnect capability is initially limited to Oracle’s Ashburn, Virginia (North America) region and Microsoft Azure’s U.S. East, though they plan to expand that reach in the future.

Market Dynamics

The partnership comes as Oracle’s cloud business continues to struggle. SAP CEO Bill McDermott recently said the company was moving its cloud business off of Oracle toward more use of … wait for it …. Microsoft Azure.

That SAP maneuver echoes a similar push by Amazon to ditch its reliance on Oracle software. According to a CNBC report last year, Amazon has already moved much of its infrastructure internally to its Amazon Web Services (AWS) division and plans to be completely off Oracle’s database software by the first quarter of 2020.

Synergy Research Group’s most recent Cloud Provider Competitive Positioning report had Oracle entrenched in its “strong niche player” space alongside IBM, Salesforce, and Rackspace. That position is below the “high growth and gaining market share” position held by larger rivals Microsoft, Google, Alibaba, and Tencent. AWS remains “in a league of its own” in the SRG report.

For Microsoft, the move continues its wide-ranging push toward expanding its reach across the cloud market. In late 2017, the company announced a similar deal with SAP to allow customers to run their HANA Enterprise Cloud on Azure. SAP, like Oracle, gained access to a more broadly used cloud environment.

The move also comes on the heels of Google launching its Anthos platform that basically uses its Cloud Platform (GCP) as a central management plane to control data running across rival cloud systems. Anthos is a Kubernetes-based, Google-managed hybrid-cloud platform that runs on premises and supports multiple clouds including AWS and Azure.