In mid-March the Wall Street Journal broke the news about an ongoing acquisition discussion between IBM and Sun. The deal never happened and IBM walked away retiring a $7 billion offering.
At this point Oracle jumped in and acquired Sun for $7.4 billion.
For the virtualization industry this is a very interesting move.
Sun is finalizing an entire virtualization portfolio, the xVM family, that includes a much delayed hypervisor based on Xen (Server), an enterprise management solution (Ops Center), a connection broker (VDI) and even a desktop virtualization solution (VirtualBox).
On its end, Oracle announced its own virtual infrastructure in November 2007, which includes a Xen-based hypervisor (VM Server) available free of charge and an enterprise management solution (VM Manager).
So far Oracle kept a low profile and didn’t seriously push its presence in the virtualization market, at the point that most people believe that Oracle VM is just for Oracle workloads. But the company strategy is very different: the database vendor wants to become a fully accredited virtualization vendor and compete with its former partner VMware.
So far Sun has played very nice with VMware (for example, by giving priority to ESX over xVM Server inside Sun VDI) but Oracle is all but friendly with the virtualization player and the attacks are intensifying.
With this acquisition Oracle gets the entire Sun virtualization portfolio, and its entire computing stack (servers, storage, hypervisor, operating system, management layer, connection broker, etc.).
If Oracle plays well its cards here in a couple of years it may become a dangerous competitor for VMware.
Another implication of this deal is that Oracle doesn’t need Virtual Iron anymore.
In the past weeks virtualization.info reported about rumors of a possible acquisition.
Of course the deal has several implications that are not related to virtualization.
One is that Oracle may finally cut its dependence on Red Hat and its Enterprise Linux in favor of Solaris.
Another, which will have a much bigger impact, is that MySQL (acquired by Sun in January 2008) may change into something completely different.