Oracle signage is seen outside Mocsone Center during Oracle OpenWorld 2012 in San Francisco, Calif. in this October 1, 2012 file photo. REUTERS/Stephen
Oracle signage is seen outside Mocsone Center during Oracle OpenWorld 2012 in San Francisco, Calif. in this October 1, 2012 file photo. REUTERS/Stephen Lam/Files (STEPHEN LAM)

REDWOOD CITY -- Facing increasing competition from other cloud-computing companies, Oracle on Monday announced a partnership that will let business customers access some of its key products on cloud services provided by its longtime software rival Microsoft.

Under the deal, Microsoft's Azure cloud offering -- which companies use to run Web-based programs -- and its cloud-based server will feature Oracle's widely used database and Java software.

"We're excited about this announcement," Oracle President Mark Hurd said during a conference call with industry analysts. "Customers need and want more flexibility and choice," he added, noting that increasing numbers of businesses are accessing software through cloud-based services.

Traditionally, Oracle's software has been installed on individual business computers and those customers paid a fee to use the product and have Oracle maintain it. With the cloud-computing model, on the other hand, companies like Oracle keep their software on their own servers and let customers access it over the Internet for a fee.

But Oracle and Microsoft face growing competition from other cloud-software providers, such as Amazon.com and Salesforce.com, headed by one-time Oracle executive Marc Benioff.

By cooperating in the cloud, some analysts said, both should be stronger. "As more enterprises go into the private and public clouds it creates an ecosystem that both Microsoft and Oracle need to tap into," said FBR Capital Markets analyst Daniel Ives. "This partnership will create another avenue of growth to attack the cloud market over the coming years."

It's unclear how much revenue the companies will generate from the deal, however. Neither company revealed financial terms for their new collaboration.

The two software titans have been business rivals for years and Oracle CEO Larry Ellison has sometimes harshly criticized Microsoft, based in Redmond, Wash. But as their business customers have migrated to the cloud, "people wanted more from us, people wanted more from Oracle," Microsoft CEO Steve Ballmer said during the conference call.

Although Oracle and Microsoft will still compete, he added, when asked about their sometimes prickly dealings in the past, "relations between the two companies I think have evolved in a very positive and constructive manner."