Oracles Expands Virtualization Platform with Xsigo Acquisition

Enterprise software giant Oracle (NASDAQ: ORCL) is bolstering its portfolio of virtualization solutions with the acquisition of Xsigo Systems, a provider of network virtualization technology, for an undisclosed sum.

The acquisition will see Xsigo’s networking software technology folded into Oracle’s systems portfolio, giving the company a more complete set of virtualization solutions for cloud computing and allowing it to compete with solutions from Hewlett-Packard (NYSE: HPQ), IBM (NYSE: IBM) and Dell (NASDAQ: DELL).

Xsigo technology is designed to simplify cloud infrastructure and operations by allowing customers the flexibility to connect any server to any network and storage, boosting simultaneously application performance while reducing cost.

Based in Sunnyvale, Calif., Xsigo was founded in 2004 and launched its first offering in 2007 at VMworld, a data center box appliance called VP780 I/O Director that replaced physical network and storage interfaces with virtual substitutes that functioned the same way. In the fall of 2011, the company launched Server Fabric, software for virtualizing networks in cloud-optimized data centers. Its products have been deployed at more than 300 enterprises worldwide, including British Telecom, eBay, Softbank and Verizon.

Fabric Accelerator dynamically connects VMs and servers to networks, storage and other VMs through Xsigo’s Private Virtual Interconnect, a software-defined link between two resources, while the Fabric Manager interface allows the creation, monitoring and management of network and storage connections across all servers from a single management point.

Oracle customers and partners can gain immediate access to Xsigo products. Oracle plans to continue to invest in the technology, evolving the solutions and deepening the integration capabilities with Oracle technology. The company also plans to continue working with existing Xsigo partners on providing end customers with network virtualization technology that can benefit cloud deployments, whether Oracle or non-Oracle.

The transaction is subject to customary closing conditions and approvals and is expected to close in the fall of 2012. Until the transaction closes, the two companies will continue to operate independently.