Page 3 of 4
Oracle, in a FAQ on the subject, wrote, "Xsigo complements Oracle's software, server, storage, and network product portfolio and enhances Oracle's capability to seamlessly integrate industry leading products and solutions into enterprise clouds while dramatically reducing the complexity and cost of deploying and managing the infrastructure for cloud enabled systems."
Such a move would make Oracle the only vendor to build converged infrastructures with storage, server and networking technology combined with middleware and application software. Most of Oracle's primary systems vendor competitors, including Hewlett-Packard, IBM, Dell and Cisco, can go as far as servers, storage and networking in their converged infrastructures.
Because Xsigo's I/O Director replaces Layer 2 networking switches and routers, Oracle's acquisition of Xsigo could impact sales of traditional networking vendors. By Xsigo estimates, its technology could result in 70 percent fewer switches, server cards, and cables being used. "Some customers start with 20 cables coming from a single server and consolidate it down to two," Toor said.
As a result, how much impact Oracle will have on the networking industry depends in part on how quickly sales of Oracle's pre-engineered systems grow.
Oracle also promised to make the Xsigo technology available to non-Oracle customers as well. However, in Oracle's recent history, it has a tendency to be much more focused on integrating its technology into its pre-engineered systems rather than selling stand-alone offerings. For instance, since its acquisition of Sun, Oracle's stand-alone server and storage revenue has steadily fallen even as its pre-engineered systems sales have quickly grown, albeit from a small starting base.
Toor said Xsigo technology is not typically used to rip out existing networking infrastructure. "The most common use is when customers are touching the servers, for instance to upgrade the servers or the networking equipment," he said.
Xsigo as a stand-alone company had a very nice run and mounted a very significant challenge to networking vendors, said Keith Norbie, vice president of Nexus, the Minnetonka, Minn., office of Stratos Management Services, an Atlanta-based solution provider and Xsigo channel partner.
"Is Oracle's acquisition of Xsigo a reaction to VMware's acquisition of Ncira?" Norbie said. "Or is it a long-term play by Oracle against Cisco in networking? In either case, Xsigo has a cool technology. It can fit into an SDN play if Oracle wants to make it a part of an all-Oracle stack."
NEXT: But What About The VMware Demo Truck?