Oracle (NASDAQ:ORCL) announced that it has entered into an agreement to acquire Xsigo Systems, a leading network virtualization company. It simplifies cloud infrastructure by using software-defined networking technology to allow customers to dynamically connect any server to any network as well as storage, resulting in efficient resource usage. We expect the technology of Xsigo to be integrated with Oracle VM for server virtualization, making Oracle cloud environment more cost effective. The terms of the deal was not disclosed. 
Oracles Cloud Play Continues
The deal was announced a few days after Oracles competitor in the virtualization space, VMware announced its acquisition of Xsigo’s rival Nicira for $1.26 billion. Xsigo has hundreds of enterprise customers including British Telecom, eBay, Softbank and Verizon. The key to Xsigo’s success is the software defined virtualization technology which creates virtualized pools of network capacity, storage etc which can be delivered dynamically according to computing loads and traffic. Oracle continues to grow in the social, cloud and mobile space inorganically and we can expect more acquisitions in the social and cloud space.
We currently have a $39 Trefis price estimate for Oracle, which is ~30% above its current market price.Notes: