VARs: Oracle's Virtualization Strategy Advances With Virtual Iron Deal

Oracle on Wednesday said it will acquire Virtual Iron Software for an undisclosed sum and combine its server virtualization management capabilities with the Oracle VM server virtualization hypervisor software.

The move comes less than a month after Oracle said it plans to acquire Sun Microsystems in a $7.4 billion bid.

Virtual Iron of Lowell, Mass., is a developer of server virtualization products, including a hypervisor; virtualization services, such as server partitioning and virtual infrastructure creation; and an enterprise-class server virtualization management application.

Oracle unveiled its Oracle VM platform in late 2007. Oracle VM provides technology for server consolidation, high availability and live virtual machine migration.

The biggest concern current Virtual Iron solution providers have about the acquisition is whether Oracle will keep the Virtual Iron software pricing at its current low levels to better compete against VMware.

Dave Affleck, CEO of Vucci, a Lehi, Utah-based solution provider and VMware partner who signed with Virtual Iron about six months ago, said an increase in price would hurt the competitiveness of the Virtual Iron offering.

"The pricing of Virtual Iron's software is way below VMware's pricing," Affleck said. "If the acquisition causes prices to change, that's a big negative."

Buzzworthy Consulting, an Iron Mountain, Mich.-based solution provider that was founded in January of this year, signed up with Virtual Iron a couple of months ago based on the recommendation of an employee and because of its low price, said Jacob Shields, tech director and partner.

For Buzzworthy Consulting, the acquisition is an opportunity to start working with Oracle, Shields said. "A lot of us wanted to jump on the Oracle bandwagon, but we didn't have the time," he said. "We've been looking to do it. Now's the time."

The acquisition will be very good for Virtual Iron and its partners, said Zeki Yasar, enterprise consultant at ePlus, a Herndon, Va.-based solution provider and partner to VMware, Citrix and Virtual Iron.

Yasar said that Virtual Iron should complement Oracle VM well. He also said he has worked with Oracle VM and found it an easy way to do virtualization, but the product was not complete.

"Oracle doesn't seem to have done a lot of work on it, except for the addition of templates for working with Oracle Enterprise Linux," he said. "Nothing too radical. The other virtualization software vendors' products are much more sophisticated. Virtual Iron will give Oracle a lot of features it is lacking."

The acquisition certainly legitimizes Virtual Iron as a major option for server virtualization, said Keith Norbie, director of the storage division of Nexus Information Systems, a Minnetonka, Minn.-based solution provider and VMware partner.

However, Norbie said, Oracle does not have a good history in terms of the adoption rate of its Oracle VM technology, and that the same fate could befall Virtual Iron under Oracle.

"Oracle VM is mainly adopted by people who only buy Oracle products," Norbie said. "By the people who wake up in the morning and ask Oracle what to do."

Norbie also sees little threat from Oracle because of that vendor's record of working with VMware.

"Oracle on VMware has been a mixed category for users," he said. "Oracle doesn't really support it. Oracle's strategy is Oracle-on-Oracle, the vertical stack."

However, Norbie said, Oracle is building that vertical stack with the acquisition of Sun, which will give it server, storage, Solaris and virtualization offerings. And that could help Oracle become a major player in the virtualization market, he said.

"It will be a heated battle," he said. "But I'm not sure Oracle can pull it off. VMware's CloudOS concept [for making technology available to help customers implement cloud computing] has a lot more flexibility for running SQL, Oracle and other applications."

As a result, Norbie said he does not see a lot of people supporting a vertical stack like Oracle. "I look for more of a horizontal stack, like VMware's CloudOS," he said. "But this gives Virtual Iron a shot in the arm."

Rolf Strasheim, director of client solutions at Peak UpTime, a Tulsa, Okla.-based solution provider, said Oracle's acquisition of Virtual Iron actually sends a clear message that it is serious about keeping Sun's hardware after it acquires Sun.

"Oracle has the software and the virtualization," Strasheim said. "They need the hardware to run it. To me, it signals a commitment there. With them buying Virtual Iron, and with the Sun acquisition, to me it's easy to connect the dots."