Oracle Buys Network Virtualization Specialist Xsigo

Oracle (ORCL) announced this week that it has entered into an agreement to acquire Xsigo Systems, a leading provider of network virtualization technology.

San Jose based Xsigo is privately held and in eight years has grown to service over 300 enterprise customers across numerous industries.

Xsigo's I/O virtualization system replaces network interface cards (NICs) and host bus adapters (HBAs) with virtual network and storage interfaces. The Director appliance makes a single network connection appear to be multiple virtual NICs or HBAs, providing a simpler, cheaper and more flexible way for servers and storage to connect and interact.

Xsigo's Fabric Directors dynamically connect servers to all cloud resources, its Fabric accelerator connects VMs and servers to networks, and the Fabric Manager software allows the creation, monitoring and management of network and storage connections.

Xsigo will extend Oracle's virtualization capabilities and continue to build on its cloud strategy. Oracle buying into virtual I/O with Xsigo comes one week after VMware announced its $1.2 billion acquisition of SDN provider Nicirera.

"The proliferation of virtualized servers in the last few years has made the virtualization of the supporting network connections essential," said John Fowler, Oracle Executive Vice President of Systems. "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."

Combined with Oracle Virtual Server technology, the Xsigo tools will complete a set of virtualization capabilities for cloud environments. Subject to customary closing conditions and approvals the transaction is expected to close in the fall of 2012.