It's not Sony Playstation working with Microsoft Xbox.
It's Sony Corp making projects, research and collaboration on Microsoft Azure. This is not crazy and doesn't mean they'll be working on game titles development stuff together.
This actually makes allot of sense for Sony... Rather than invest Billions in building-out an expensive cloud service that will only be used by their gaming division... Leverage one of the big Three's (Google, Amazon, Microsoft) efforts instead who have done the hard work.
The cloud isn't getting any smaller... Plus this should relieve some pressures on their slower Playstation Network too.
God bless You.
When PS4 will hit 100m consoles sold: Before Christmas 2019
There were three ravens sat on a tree / They were as blacke as they might be / The one of them said to his mate, Where shall we our breakfast take?