Microsoft CEO Satya Nadella

Mutual self-interest can drive even rivals to embrace each other, as IBM and Microsoft have done with a new alliance  that’s aimed at leveling the playing field against infrastructure-as-a-service kingpin Amazon.com Inc. and, to a lesser extent, each other.

The partnership has two primary components. Microsoft will make its core on-premise offerings available on IBM’s public cloud, which is built on the SoftLayer infrastructure IBM acquired for $2 billion last year and which it has been expanding aggressively ever since. Users will be able to purchase licenses for Windows Server and SQL Server running on SoftLayer directly through IBM. This adds an extra degree of convenience that is absolutely essential when the competition – Amazon – is already offering the same.

Even more significantly, IBM will bundle Microsoft’s .NET development framework – which powers practically all Windows applications in the enterprise – into Bluemix, a platform-as-a-service development stack it introduced in March. The integration opens up Bluemix to millions of .NET developers, giving Big Blue access to a massive new market. In exchange, IBM will add improved support for Microsoft’s Hyper-V hypervisor, which has gained considerable ground on VMware Inc.’s market-leading vSphere in recent years.

Microsoft will also add several IBM solutions to the Azure lineup. The list includes a sizable portion – but not all – of the solutions that Big Blue has already made available for Amazon Web Services, including WebSphere Application Server, WebSphere MQ and DB2 database software. The offerings will be available to customers of the infrastructure-as-a-service platform on a pay-per-use basis alongside IBM Pure Application Service for extending on-premise applications running on IBM gear into the public cloud.

Amazon is not giving up its edge so easily, however. The retail giant is countering the partnership with the launch of a hosted directory service that allows customers to import existing profiles from their on-premise repositories, the majority of which are powered by Microsoft software, for a fixed rate. The tool also enables admins to set up brand new directories in the cloud that Amazon says provide most of the functionality available in its rival’s offering, most notably group-based policy enforcement and single sign-on.

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