In a surprise move, Oracle Corp. and Microsoft Corp. have announced that Oracle products, including Java, the Oracle Database, and Oracle WebLogic, are certified for Windows Server Hyper-V and Windows Azure. This means that Oracle will provide full support for customers running those, and presumably other Oracle products, on Hyper-V. This is a complete reversal of Oracle’s policy, which until now has been to refuse to officially support its products on any hypervisor except its own. Customers have run Oracle database products and ERP on VMware, but they can be on their own if problems arise.

Under the agreement announced Monday, Microsoft will offer Java, Oracle Database, and Oracle WebLogic Server to Windows Azure customers, and Oracle will make Oracle Linux available to Azure customers.

Terms of the deal were not announced, leaving open the question of whether this is an exclusive or non-exclusive deal. If Oracle does not intend to sign a similar agreement with VMware, AWS, Google Compute Engine, or other hypervisor and IaaS providers, this could provide a huge market advantage to Microsoft in the enterprise market. Wikibon Analyst Scott Lowe has written that Microsoft wants to own the enterprise data center, and an exclusive deal with Oracle would go a long ways towards that goal and catapult both Hyper-V and Azure into major contenders in the IaaS and hypervisor markets respectively.

On the other hand, if this is the first step in Oracle changing its strategy generally and announcing full support for Oracle on VMware and other hypervisors as well, this will mean that the last major holdout has accepted that virtualization is the future.

In either case this is good news for the large number of enterprises and midmarket companies that run core applications, including financials and ERP, on Oracle. It clears the way for them to virtualize those huge databases with full Oracle support rather than having to depend on internal support and any help their Oracle sales rep can provide sub rosa.