Oracle Buys Xsigo to Untangle Data Center Networks

The software giant announced the deal on Monday, but terms of the deal were not disclosed.

Although comparisons with VMware’s $1.26 billion acquisition of Nicira are inevitable, Xsigo actually makes a very different type of product. Whereas Nicira offers a tool that lets you build entire computer networks using nothing but software, Xsigo sells a simpler product called Data Centre Fabric (DCF), which is specifically designed to virtualize network cards and connections, reducing the amount of physical hardware and network cabling required to run a network of virtual machines.


But both Xsigo and Nicira are gunning for network hardware giant Cisco. Nicira is doing it by making it possible to use commodity hardware instead of expensive Cisco switches and routers. Its network controller can be used with practically any networking hardware, including the new breed of low-cost gear coming straight from Taiwan. Xsigo is doing it by reducing the number of switches you need in the first place.


Both go right to the heart of the “converged infrastructure” approach that major vendors — including Cisco, HP, and Oracle — are pushing. Converged infrastructure generally refers to large packages of integrated hardware and software purchased from a single vendor. Though a converged infrastructure system may include components from a vendor’s partners, the basic idea is to get everything you need from one place.


The downside is that the individual components blade servers, network gear, etc. aren’t necessarily cross-compatible with products from other vendors. This locks you into one vendor’s converged infrastructure offering. Xsigo and Nicira’s tools push back against this trend.


Virtual networking isn’t as attractive as big data or the consumerization of IT, but these acquisitions prove that it’s an important revolution in the way enterprises manage infrastructure.

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