Oracle announced on Monday that it has agreed to acquire network virtualization technology provider Xsigo Systems.
"The proliferation of virtualized servers in the last few years has made the virtualization of the supporting network connections essential," said Oracle Executive Vice President of Systems, John Fowler. "With Xsigo, customers can reduce the complexity and simplify management of their clouds by delivering compute, storage and network resources that can be dynamically reallocated on-demand."
Xsigo CEO Lloyd Carney said, "Customers are focused on reducing costs and improving utilization of their network. Virtualization of these resources allows customers to scale compute and storage for their public and private clouds while matching network capacity as demand dictates."
Fowler sent the following letter to Oracle's customers and partners about the acquisition:
Dear Customers and Partners,
On July 30, 2012, Oracle announced that it has entered into an agreement to acquire Xsigo Systems, a leading provider of network virtualization technology that simplifies cloud infrastructure and operations by allowing customers to dynamically and flexibly connect any server to any network and storage. The transaction is subject to customary closing conditions and approvals and is expected to close in the fall of 2012. Until the transaction closes, Oracle and Xsigo will continue to operate independently, and it is business as usual.
Companies are looking to deploy virtual servers to reduce data center costs and meet the agility and performance demands of cloud environments. Virtualized servers require more bandwidth and connections to external network and storage resources, which can lead to higher connectivity costs and complex data center management.
Xsigo's software-defined network products help customers increase asset utilization and application performance while reducing costs by delivering compute, storage and network resources that can be dynamically reallocated on demand. Xsigo complements Oracle's software, server, storage, and network product portfolio, and the combination is expected to deliver the most complete set of virtualization capabilities for cloud environments.
More information about the proposed combination of Oracle and Xsigo can be found at oracle.com/xsigo.
We appreciate your continued support.
Executive Vice President
Terms of the acquisition have not been disclosed, but it seems likely that the Oracle is paying a pretty penny.
Last week, VMware announced that it is acquiring software-defined networking (SDN)/network virtualization provider Nicira for $1.05 billion in cash plus about $210 million of assumed unvested equity awards.