Oracle Terminates Virtual Iron Reseller Partners

server virtualization

Solution providers have received termination letter from Oracle and a couple of key sales and channel executives have left Virtual Iron, signs that Oracle's main purpose in acquiring Virtual Iron is to absorb its technology into its Oracle VM server virtualization offering.

Oracle last month acquired Virtual Iron Software in a move to use server virtualization to boost its software application business and in the process its competitiveness in relation to Microsoft.

Virtual Iron developed server virtualization products, including a hypervisor, virtualization services such as server partitioning and virtual infrastructure creation, and an enterprise-class server virtualization management application.

Oracle unveiled its Oracle VM server virtualization platform in late 2007. Oracle VM provides technology for server consolidation, high availability and live virtual machine migration.

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Virtual Iron's dynamic resource and capacity management technology adds the management capabilities which Oracle VM requires in order to compete with other server virtualization offerings such as VMware ESXi and vSphere 4, Citrix XenServer, and Microsoft Hyper-V.

Legacy Virtual Iron solution providers earlier this month received a letter from Oracle via FedEx saying that they have been terminated as a Virtual Iron partner, but will be considered for re-signing as an Oracle partner.

The letter came at about the same time two top executives left Virtual Iron for Akorri, a Littleton, Mass.-based developer of software for optimizing performance and utilization in dynamic data centers.

Those executives include Bill Simpson, vice president of worldwide sales at Akorri and the former vice president of global channel sales and strategy at Virtual Iron, and Warren Mead, vice president of U.S. channels at Akorri and the former Virtual Iron national sales director.

Bill Simpson is also a 2009 Channel Chief.

Simpson and Meade are expected to formally join Akorri in early July.

Akorri declined to comment on whether Simpson and Mead joined the company as a result of Oracle's acquisition of Virtual Iron, and declined to make the two executives available to comment.

Solution providers said that they believe that Oracle acquired Virtual iron specifically for its technology, and little else.

Dave Spear, vice president of sustainability at Istonish, a Denver-based virtualization solution provider, said he felt that Virtual Iron had a better technology than other vendors such as Citrix.

Spear said he also felt that Oracle was not for Virtual Iron's customer or partner base.

"If I was (Oracle CEO) Larry Ellison, I would do the same thing. I don't believe Virtual Iron's go-to-market strategy maps well with Oracle's," Spear said.

Oracle did not mention anything about transition plans or support for existing customers, Spear said. "I'd guess they don't care about keeping Virtual Iron's client base," he said. "Virtual Iron focuses on smaller customers, and smaller customers are not Oracle's focus."

Casey Crellin, president of Client Systems, a Denver-based solution provider, said his company had a Virtual Iron reseller agreement since 2007, but that sales of the technology were limited.

Neither Oracle nor Virtual Iron personnel contacted Client Systems prior to sending out the termination letter, Crellin said.

"They've obviously made a decision that they were interested in the technology that they have," he said. "They weren't interested in preserving the reseller relationships and the channel that Virtual Iron had."

Crellin said he might be upset if Client Systems were a major Virtual Iron player and if that vendor was part of a major sales push for his company. "It's not," he said. "It's not something that I am going to get too worked up about. I'll leave it up to others to decide what is right, wrong, or indifferent about how it was handled."

Oracle and Virtual Iron declined to discuss the change in Virtual Iron's status.

During a conference call last week with financial analysts about Oracle's fourth-quarter results, CEO Larry Ellison was asked about the opportunity to use Virtual Iron's technology to change the competitive landscape. Ellison said Oracle has been experimenting with running its database software directly on a hypervisor, or virtual machine monitor, without an operating system. While not disclosing specific plans for the Virtual Iron technology, Ellison said it's part of Oracle's plan to offer customers a complete stack of integrated technology, from hardware, operating systems and virtual machines, to the Oracle database, middleware and applications. "It's an opportunity to continue to improve our [technology] performance," Ellison said. Rick Whiting contributed to this story.