Corrected: Oracle, VMware agree to deal on cloud technology, technical support

(This September 16 story corrects to change "with" in sixth paragraph to "without".)

By Stephen Nellis

SAN FRANCISCO (Reuters) - Oracle Corp <ORCL.N> and VMware Inc <VMW.N> on Monday announced a deal designed to resolve years of tension over how Oracle handles technical support for VMware users and make it easier for them to move to Oracle's cloud computing service.

Oracle is competing against Amazon.com Inc <AMZN.O> and Microsoft Corp <MSFT.O> to offer cloud services, where businesses use Oracle's data centres to handle their computing needs. In recent years, cloud providers have worked to woo large businesses that still run their own data centres to move some or all of that work to the cloud.

VMware has emerged as a key player because many cloud holdouts use it to power their own data centres. To win over those customers, cloud providers need technical compatibility with VMware. Amazon, Microsoft and Alphabet Inc's <GOOGL.O> Google have all announced partnerships with VMware in recent years.

Oracle, which announced the deal at its annual user conference in San Francisco, OpenWorld, has designed a system to allow joint customers to move VMware-based computing work to its cloud without reworking the code, said Clay Magouyrk, senior vice president of engineering Oracle Cloud Infrastructure.

"We've focussed on giving customers maximal control," he told Reuters. "We had to do some very fundamental engineering."

The two companies said that Oracle would offer technical support to customers who run its applications on top of VMware. Many companies will not run business-critical systems like financial software without the option for support.

Oracle and VMware have clashed in the past over the issue.

VMware's core tool splits up one physical computer server into multiple smaller "virtual" machines to ensure that all of a company's computers are put to full use. Oracle offered a competing product and was unclear on whether it would provide support when, for example, its financial software was used with VMware.

Oracle said on Monday it would now provide support for those situations.

"Customers don't want to deploy two products unless it's supported by both vendors. This was a stumbling block for the past two decades," said Sanjay Poonen, chief operating officer for customer operations at VMware, said in an interview.

"Our relationship with Oracle is significantly better than it was 20 years ago. It's a new day."

(Reporting by Stephen Nellis in San Francisco; Editing by Sonya Hepinstall)