Oracle Acquires Virtualisation Specialist Virtual Iron

Oracle has purchased Virtual Iron, designer of server virtualisation software for cost-conscious businesses.

The latest Oracle acquisition should come as a surprise to few. In March 2009, rumors drifted that Oracle was close to acquiring Virtual Iron, after the release of a research report by Katherine Egbert, an analyst with Jefferies & Co., who wrote that Oracle would likely purchase the company in order to strengthen its server virtualization management capabilities.

Virtual Iron, which started in 2003, specialises in low-cost virtualisation products for a wide range of businesses, from small mom-and-pop operations to the enterprise. Previously, it attempted to challenge VMware and Citrix Systems, mostly on price point. Considered a relatively minor player with middling market share in the virtualization market, the company had roughly 2,000 customers and a reported $65 million (£43m) from its last round of funding.

In a statement, Oracle suggested that incorporating Virtual Iron’s technology would allow it to “provide more comprehensive and dynamic resource management across the full software stack.” The acquisition of Virtual Iron, along with the additional virtualisation technology Oracle now owns in the wake of the Sun Microsystems deal, should allow the software company to better compete against VMware, as well as Citrix Systems and Microsoft with its Hyper-V technology.

Like Oracle, Virtual Iron utilises the open-source Xen hypervisor, and its products could potentially be used by Oracle to strengthen the Oracle VM, presenting customers with the option to virtualise within the Oracle ecosystem as opposed to relying on a product from VMware or other players in the space.

Financial details of the agreement, which is expected to close this summer, were not disclosed.

“With the addition of Virtual Iron, Oracle expects to enable customers to more dynamically manage their server capacity and optimize their power consumption,” Wim Coekaerts, vice president of Linux and Virtualisation Engineering for Oracle, said in a statement. “The acquisition is consistent with Oracle’s strategy to provide comprehensive enterprise software management and will facilitate more efficient management of application service levels.”

Even in the face of the global recession, Oracle has continued to acquire companies in 2009, following on the 11 purchased in 2008. Its first buyout of the year was mValent, a small company that offered configuration management solutions.

Oracle landed a much bigger fish, however, in April 2009, when it announced plans to acquire Sun in a deal worth roughly $7.4 billion, or $9.50 a share. The Sun acquisition allows Oracle to more fully leverage Java and Solaris for many of its products, and compete more aggressively against IBM and its DB2 database middleware.