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Oracle Dumps Virtual Iron

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When early march this year we talked about Oracle eying Virtual Iron we noted that Oracle needed to fill the VM Management gap that RedHat was leaving on Xen level by moving to KVM.

Turns out that that indeed was their main target, late last month Oracle announced their key virtualization strategy to their old Virtual Iron customers,
Oracle is clear that they want too provide a Xen based next generation Virtualization architecture has zero license cost and zero key management.

They will be providing official application certification , they were already providing their customers with different OracleVM templates which gave them different Oracle based Appliances and earlier this month they announced they will be providing the community with their own Open Source Virtual Appliance builder, based on yet another JeOS, (Just Enough OS) platform, this time one based on Oracle Linux.

But more importantly was their message to the old Virtual Iron customers, Virtual Iron Products sales has been stopped, software download availability will be discontinued , also replacement media won’t be available anymore. there won’t be any more upgrades , support for the different Virtual Iron products will end in February 2010 at last (that’s for the last 4.5.16 release)

Oracle is giving the old Virtual Iron Customers 3 options ..

– When they continue to run Virtual Iron’s existing platform they will get support from Oracle they then can migrate at their own pace with migration tools provided by Oracle, Oracle realizes there will be some effort involved but they will do their best to make it easier.

– Another option is to already start running OracleVM today side by side with Virtual Iron, that way users can gain experience with the platform quickly. Oracle will be providing V2V conversion tools that can convert VHD virtual disks to Oracle VM disk images.

– And the third option is to move to OracleVM today, at no additional license cost, customers only need to pay for OracleVM

Looking at the time Oracle still wants to support the Virtual Iron platform to us that translates to .. you have 12 months to migrate, better do it fast. off course there’s already plenty of VM management frameworks that support Xen around , so Virtual Iron customers can choose to migrate to another platform if they want to.

VMware Makes It Easy For Virtual Iron Customers To Migrate To vSphere 4

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VMware yesterday announced that it is offering existing Virtual Iron customers an easy way to migrate their Virtual Iron deployments to VMware vSphere 4.  In light of news reports that Oracle will discontinue development of existing Virtual Iron products, the VMware offer gives companies a cost-effective way to upgrade to VMware vSphere 4, and provides customers a clear virtualization roadmap that will help meet their needs as their business grows.

The VMware offer gives Virtual Iron end customers who have a current license and support contract compelling savings on VMware vSphere 4 and VMware vCenter Server. More specifically, eligible Virtual Iron end customers receive aggressive discounts off the list price on the below products and services:

  • VMware vSphere 4 Advanced Edition, VMware vSphere 4 Enterprise Plus Edition, VMware vCenter Server Foundation and VMware vCenter Server Standard
  • Support and subscription (SnS) on VMware vSphere 4 Advanced Edition, VMware vSphere 4 Enterprise Plus Edition, VMware vCenter Server Foundation and VMware vCenter Server Standard

Proof of a current Virtual Iron license and support contract will be required to qualify for the VMware offer. Promotional pricing is limited to the number of Virtual Iron licenses supported by a current support agreement. The offer is valid through September 30, 2009.

VMware vSphere 4 delivers Virtual Iron customers the unparalleled efficiency and performance   required to run critical applications in large scale environments, uncompromised control over application security and service levels, and unmatched flexibility of hardware, OS, application architecture and on-premise vs. off-premise application hosting.

VMware vSphere 4 also delivers “Always On IT” for small and midsized businesses (SMBs) and remote and branch office (ROBO) IT environments. With VMware vSphere 4, smaller IT environments can achieve zero-downtime application availability, enterprise-class data protection, disaster recovery and simplified management at an affordable price point.

Oracle To Terminate Virtual Iron Business

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Oracle recently acquired Virtual Iron, even if it wasn’t exactly generating spectacularly good financial results (to put it midly). Now The Register claims Oracle is discontuining Virtual Iron’s business. More specifically, Oracle intends to “suspend development of existing Virtual Iron products and will suspend delivery of orders to new customers.”

Oracle aims to fully integrate Virtual Iron technology with Oracle VM, the company’s server virtualization and management product, although it has not specified when the new combined product will arrive. Former Virtual Iron people are also being laid off.

Full report at The Register.

NY Times: Virtual Iron Was Bleeding Money When Oracle Bought It

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We recently reported Oracle had acquired Virtual Iron, but now The NY Times has obtained financial documents that show Virtual Iron lost a heck of a lot of money in 2008:

“The documents indicate that Virtual Iron had just $3.4 million in revenue last year. That’s a big rise over $1.5 million in 2007. But Virtual Iron sure spent a lot of money to get that revenue.

Its sales, marketing, research, development and administrative costs were $17.7 million last year, up from $13.6 million in 2007. So, in 2008, Virtual Iron posted a loss of $15.3 million.

Last January, Virtual Iron raised $20 million, hiking its total funding up to $65 million. Highland Capital Partners, Matrix Partners, Goldman Sachs, Intel Capital and SAP Ventures all funded the company.

Oracle has declined to reveal how much it paid for Virtual Iron, but with the revenue in 2008 sitting so low, it seems pretty clear that the investors lost out on this start-up — that is, unless Oracle was willing to pay many, many times Virtual Iron’s revenue. (The company did report $17 million in cash and equivalents in 2008.)”

Ouch. Hard to get excited over this particular case of M&A, even in these troubled times.

Following Move To Acquire Sun, Oracle Buys Virtual Iron

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As had been rumored for quite a while, Oracle has now agreed to acquire Virtual Iron Software, a provider of server virtualization management software that enables dynamic resource and capacity management in virtualized data centers (we’ve covered the company quite a bit in the past).
This comes right off the heels of Oracle’s move to swallow Sun Microsystems.
The combination of Virtual Iron’s technology and Oracle VM’s server virtualization product is expected to provide more comprehensive and dynamic resource management across the full software stack. Customers are expected to benefit from better capacity utilization, streamlined virtual server configuration, and improved visibility and control of their enterprise software.
The transaction is subject to customary closing conditions and is expected to close this summer. Until the deal closes, each company will continue to operate independently. Financial details of the transaction were not disclosed.
“Industry trends are driving demand for virtualization as a way to reduce operating expenses and support green IT strategies without sacrificing quality of service,” said Wim Coekaerts, Oracle Vice President of Linux and Virtualization Engineering. “With the addition of Virtual Iron, Oracle expects to enable customers to more dynamically manage their server capacity and optimize their power consumption. The acquisition is consistent with Oracle’s strategy to provide comprehensive enterprise software management and will facilitate more efficient management of application service levels.”
(Source: ZDnet)

Oracle To Buy Virtual Iron?

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The rumour is spreading , but so far no official feedback from Oracle.

Local Techwire reports that there are talks between Oracle and Virtual Iron ongoing and that Oracle is aiming at Virtual Iron to expand its server virtualization management platform.

According to Local Techwire Katherine Egbert, a Jefferies & Company analyst who closely follows Red Hat, say that

It’s likely Oracle would buy Virtual Iron to improve its prospects in the rapidly growing server virtualization management market and to keep Virtual Iron technology out of competitive hands,

and note that Virtual Iron is the “fifth-largest server virtualization vendor.”

She also noted that Virtual Iron’s technology is “complementary to Oracle Virtual Machine” while also cheaper than market leader VMware.

Virtual Iron, according to TechVibes founded in 2003 , already has a questionable Virtualization History, as I wrote earlier in Open Source Virtualization Today , Virtual Iron initially had a Single Server Image implementation they sold under the Virtual Iron VFe productname , but somewhere in 2005 they changed gears and became the supplier of a server virtualization & virtual infrastructure management solution , a Virtualization Solution based on Open Source Technologies, or back then a Xen Management Solution.

Fact is that when RedHat moves towards KVM , it leaves a gap to fill for Oracle which with OracleVM today is putting it’s eggs in the Xen basket. Oracle just hosted the Xen Summit and has Wim Coekaerts on the Xen Advisory Board. So adding a company like Virtual Iron to it’s portofolio to manage those Xen based VM’s absolutely makes sense.

If or when that will happen is still the question 🙂

But we’ll keep you posted..