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5/13/2009
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Expansionist Oracle To Acquire Virtual Iron

Proposed buyout of virtualization vendor is Larry Ellison's latest move in campaign to challenge IT's heavyweights.

Oracle on Wednesday continued its efforts to build out its product portfolio through acquisitions.

The business software vendor said it has reached an agreement to acquire privately held virtualization software vendor Virtual Iron for an undisclosed sum. Oracle said it expects to close the deal this summer, subject to closing conditions.

Each company will continue to operate independently until the transaction is complete, Oracle said.

Virtualization software allows businesses to reduce hardware costs and power consumption by segmenting a single server into numerous self-contained systems and by spreading workloads across multiple devices.

"Industry trends are driving demand for virtualization as a way to reduce operating expenses and support green IT strategies without sacrificing quality of service," said Wim Coekaerts, Oracle's VP for Linux and virtualization engineering.

"With the addition of Virtual Iron, Oracle expects to enable customers to more dynamically manage their server capacity and optimize power consumption," said Coekaerts. In a separate letter to customers, Coekaerts said Oracle's acquisition of Virtual Iron offers a number of advantages.

"Customers are expected to benefit from rapid application deployment, streamlined virtualization server configuration, and improved visibility and control across Oracle's enterprise software stack," Coekaerts wrote.

Oracle said it would use Virtual Iron's technology to complement its existing virtualization offering -- Oracle VM. Oracle also stands to gain a number of key virtualization products, including xVM Server, through its pending acquisition of Sun Microsystems.

The moves could help the company become more competitive in the virtualization market with heavyweights Hewlett-Packard, IBM, Microsoft, and EMC's VMware unit.

Oracle appears intent on moving beyond its niche in database and business applications to become a fully diversified IT vendor. Its $7.4 billion deal to buy out Sun, announced April 20, gives the company a full range of hardware and software products -- from big-iron Sparc servers to desktop-productivity apps like Star Office.

Oracle shares were off 0.6% to $18.27 in midday trading Wednesday.

InformationWeek has published an in-depth report on server virtualization. Download the report here (registration required).

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