“All partnerships are tactical. There is no such thing as a strategic partnership.”
That’s one of the lessons that business and technology leader Bob Muglia tells the companies he works with these days. It’s one of the insights that has stuck with me since my recent interview with Muglia during an event for his book, The Datapreneurs, hosted by Island Books on Mercer Island in the Seattle area.
Muglia, the former Snowflake CEO and past Microsoft executive, said this in response to my question about the recently expanded partnership between Microsoft and Oracle. I asked if he would have imagined, when running Microsoft’s server and database businesses, that the rivals would someday be partners.
He started by recalling a conversation with Marc Benioff in the pre-Salesforce days.
“I still have this fairly vivid memory in my head. … I think it was probably a COMDEX party, way back in Vegas in the late 1980s. I was talking to Marc Benioff, who was at Oracle at the time. He said to me, ‘Oracle and Microsoft could be the best partners. There’s only one product standing in the way.’ And that product definitely stood in the way, and continues to be there … SQL Server.”
But more recently, Muglia said, the decision by Oracle and Microsoft to work together reflects this larger principle that the most effective partnerships are tactical, not strategic.
“The best example of this is Microsoft and Dell,” he said. “They’ve had a 35-year tactical relationship. Every meeting with Dell is always a tactical conversation.”
As in, “What can you do for me, and what can I do for you?” I clarified.
“Exactly,” he said. “This quarter! ‘I need to move this many server units this quarter,’ and next quarter, it won’t be about volume. It’ll be about margin next quarter. Literally, they would change constantly in what they wanted.”
He continued, “But in a way, it was by far the best. Because you would sit down with HP, as an example, and you would just talk about the strategic things you could do together, but nothing ever really happened. … And sometimes things didn’t happen with Dell, too, but at least you were focusing on what you were trying to accomplish.”
For the same reason, he said, a pragmatic, tactical partnership between Microsoft and Oracle makes sense now, despite their ongoing competition in the database market. In the end, customers want clouds to connect.
The latest move by Microsoft and Oracle expands on previous work by the companies to connect their cloud infrastructures for better ease of use by their joint customers. The newly announced Oracle Database@Azure service will let customers run Oracle’s database services on Oracle Cloud Infrastructure in Microsoft’s Azure data centers.
Among other benefits, the companies say the service will give Oracle customers the ability to access Microsoft’s Azure OpenAI service, which leverages the tech giant’s partnership with the ChatGPT maker.
At the same time, Microsoft and Oracle are effectively teaming up against their common rivals, the biggest of them being Amazon Web Services and Google Cloud.
Back to the conversation with Muglia, I mentioned my surprise that Oracle’s Larry Ellison only recently visited Redmond for the first time, to announce the expanded partnership publicly alongside Microsoft CEO Satya Nadella.
“I thought he was there when he looked through our trash,” Muglia joked, laughing along with other Microsoft veterans at the event about an incident long ago in which Oracle funded a group that tried to buy trash (initially unbeknownst to Ellison, he said at the time) from a pro-Microsoft group to dig up dirt on its rival. (Clearly, the companies have put this behind them at this point.)
Although the larger topic of Oracle and Microsoft was especially timely, given the recent news and Muglia’s history, it was a small part of my conversation with him. We talked extensively about insights from his book, including the past and future of databases, and the technical foundations for the new age of artificial intelligence.
Read more on those topics in The Datapreneurs, written by Muglia with Steve Hamm, available now, and also listen to my prior GeekWire Podcast discussion with Muglia for key takeaways from the book.
Thanks to Laurie Raisys and Victor Raisys of Island Books for hosting the event.
