Oracle buys VirtualIron: Is disruption coming?

Oracle has entered into a definitive agreement to purchase VirtualIron for an undisclosed sum of money. While my initial reaction was to find out what the break-up fee was, I now see the value in this acquisition. Perhaps my angst is centered around VirtualIron’s reputation in the open source community as a consumer of and not a contributor to the Xen Open Source Project.

As I’ve stated before, the gem of Oracle’s acquisition of Sun lies within Sun’s xVM virtualization projects; xVM includes virtualzation products for servers, storage, and workstations. In the early days of x86 virtualization, the battle lines were draw around the hypervisor technology itself. Today, the hypervisor has become a commodity with a plethora of commercial and open source options and the real battle centers around managing virtualized environments.

To that end, Sun has xVM Ops Center but it lags behind VMware’s Virtual Infrastructure 3 and Citrix’s XenServer. This is where the VirtualIron acquisition makes perfect sense. VirtualIron’s strategy has revolved around creating software based on the Xen Open Source Project with comparative functionality to VMware at a lower price point. Since Sun’s xVM technology is based on both the Xen Open Source Project as well as Sun’s Logical Domains (LDOM) technology, VirtualIron plugs a huge hole in Sun’s portfolio.

Oracle has never been a “me too” company, so their challenge will be to elevate VirtualIron’s products to equal footing with VMware; functionality, price, and innovation. Additionally, Oracle needs to create a new strategy to attack VMware’s recently announced vSphere Cloud Computing OS product. Clearly, the pressure is on both Oracle’s engineering teams and marketing teams to make this transition. If Oracle’s marketing team can create the same type of buzz they achieved with Fusion, then Oracle will redefine the virtualization industry.

Finally, Oracle is not done shopping. To be a player within the virtualizatoin management space you need to be able to offer heterogeneous management. Oracle must be eying companies such as Veeam or Embotics. These type of companies would complete the picture and cause major disruption in the industry. The real question is where does Oracle draw the line? Do they want to challenge IBM, BMC, CA, or HP? For what it’s worth, I sure do hope so!