July 30, 2012 – Oracle announced Monday that it plans to buy Xsigo Systems, a little more than a week after a rival in the virtualization space made its own bid for a different software-defined networking vendor.

Xsigo Systems creates configurable software for data center infrastructures with an emphasis on private cloud deployments. Its open systems architecture supports various servers, hypervisors and operating systems, and enables increased output from virtual machines and network outlets, according to its website.

On July 22, VMware offered $1.2 billion in cash and assets for SDN and innovating open source vendor Nicira. Following that deal, Forrester analyst Andre Kindness wrote that the big money for a networking vendor exposed cloud computing’s “dirty little secret [that] the cloud doesn’t exist without the network.”

In a letter to customers and partners posted online, Oracle EVP of Systems John Fowler wrote that software-defined network products from Xsigo provide the opportunity to increase on-demand application performance.

“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,” wrote Fowler.

San Jose-based Xsigo was founded in 2004 and one of its co-founders, Ashok Krishnamurthi, has a background that includes an engineering and management position at Sun Microsystems. Oracle did not disclose financial terms of the deal.

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