Virtualization War: Oracle/Sun & VI Acquisition vs. VMware & Microsoft (ORCL, JAVA, MSFT, VMW, EMC)

Oracle Corp. (NASDAQ: ORCL) is already in the process of acquiring Sun Microsystems Inc. (NASDAQ: JAVA).  This morning came an announcement that Oracle was buying a private company called VirtualIron.  Normally private company buyouts are tiny, but this is a solid and established virtualization player for undisclosed terms.  It will allow Larry Ellison and friends to be a lower cost provider against virtualization leader VMware, Inc. (NYSE: VMW) and may allow Oracle to compete against Microsoft Corp. (NASDAQ: MSFT) in one more arena.

So now Oracle will be able to go after VMware, which is still majority-owned by EMC Corp. (NYSE: EMC).  VMware has been hit by the recession, and this probably allowed Oracle to grab VirtualIron on the cheap.  Oracle is already getting MySQL via Sun Microsystems, so there is more to this than meets the eye.  This is obvious when you consider that Sun already wanted deeper virtualization.  It makes sense for its higher-end servers.

Microsoft did go further into the virtualization space as well and it was hard to tell if this was VMware Vs. Microsoft, OR VMware & Microsoft.

We got a brief interview with VirtualIron’s CEO as this sector was just starting to really explode for investors.  Unfortunately, our inquiries into addressing a rumor that VirtualIron was going to be taken was not responded to by the company back on March 2, 2009.  Don’t think this was the first word that Oracle or another company might want to or need to acquire Virtual Iron.

VMware closed down almost 4% at $27.76 today and Oracle closed down less than 2% at $18.07.

JON C. OGG