Image via Verizon

It’s not easy being an underdog in the cloud business. Verizon is years behind the competition with its enterprise IaaS offering, while Oracle’s plan to refocus from legacy maintenance contracts to cloud services has barely even begun to materialize. Recognizing that they’re in the same boat, the two tech titans are combining their resources in a push to drive value beyond the infrastructure layer.

The newly announced partnership allows companies to run Oracle databases and Fusion Middleware on the Verizon Cloud for an hourly fee. Customers have the choice of using their own licenses, which is the preferred option for Oracle shops, or the renting the software from the carrier and freeing up the bulk of up-front capital investment required for a traditional Red Stack. That means users can spin up databases as needed, an important step towards bringing the Verizon Cloud up to par with AWS. But Amazon RDS is still light years ahead with PostgreSQL support and advanced enterprise features like cross-region snapshotting and the ability to create isolated virtual networks with custom security policies.

Commenting on his company’s latest alliance, Oracle President Mark Hurd said that “this deal represents two market leaders coming together to create a compelling cloud offering that will help enterprises succeed in a highly competitive market environment […] Combining Verizon’s unique enterprise experience and capabilities with Oracle’s best-in-class cloud products will provide customers another easy and cost-effective choice for embracing the cloud.”

The agreement represents an important milestone for Oracle, which is desperately seeking new ways to offset the rapid revenue declines in its traditional software and infrastructure businesses. But Larry Ellison’s recent disclosure of his intention to break into the infrastructure-as-a-service market adds some friction for Verizon, which now faces the threat of sales cannibalization from its newest cloud partner.