Oracle is not happy enough with Sun, now buys Virtual Iron

Posted by virtualization.info Staff   |   Wednesday, May 13th, 2009   |  

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Less than one month ago Oracle acquired Sun Microsystems, closing one of the most strategic deal of the last ten years.
With Java, Solaris, MySQL, Oracle also inherited the entire Sun xVM virtualization portfolio.

Oracle has its own Xen-based hypervisor, Oracle VM Server, and its own management console, Oracle VM Manager, but it’s reasonable to believe that these two products will merge with Sun xVM Server and Ops Center in the coming months.

Any customer at this point would assume that Oracle has enough resources, engineers and developed code to release a strong virtualization product against VMware, Citrix and Microsoft.
It seems that this is not the case.

Today the company announced a second, major acquisition in the virtualization space: Virtual Iron, for an undisclosed sum.  
This confirms the rumors that virtualization.info reported in March.

So far Virtual Iron raised $65 million in five rounds of investment, one of the highest sum ever granted to a virtualization vendor.
In the last couple of quarters the company reported a healthy growth: 130% revenue growth in Q4 2008 and 65% growth in Q1 2009.
During the last year anyway, many of the original executives left the company, including the founder and CTO Alex Vasilevsky who is now heading the startup called Virtual Computer.

After the release of Xen by XenSource (now acquired by Citrix), Virtual Iron was one the first competitors to adopt it, so the company can probably count on seasoned virtualization engineers and the favor of a certain number of the Xen adopters. 
Despite that, most of the features of the Virtual Iron hypervisor overlap the Oracle VM Server and Sun xVM Server ones.
So it’s not completely clear why the database giant needed to close this additional deal.

Is Oracle trying to become the fourth major player in the virtualization space by consolidating the market?
Or is this an indirect admission that both its product and the Sun one are not competitive enough against ESX, XenServer and Hyper-V?

For sure Oracle has a big challenge now: merging the code and the portfolio of the three products will require a flawless and timely execution.
Without it the company will not be credible to the eyes of its investors, customers and partners, and it will risk a mass exodus of the Sun and Virtual Iron virtualization experts to other companies.

The first virtualization vendor to be disturbed by the new Oracle/Sun/Virtual Iron giant is Red Hat, that plans to lead the open source market with a new virtualization solution based on KVM.

The virtualization.info Virtualization Industry Radar has been updated accordingly



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