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Oracle buying Xsigo, a maker of virtual I/O systems, follow last week's big deal: VMware acquiring network virtualization start-up Nicira for $1.26 billion. And it is, of course, a follow on to Oracle's biggest data center expansion deal - the acquisition of server stalwart Sun in 2010.
The deals are indicative of the importance networking plays in the converged data center/cloud infrastructure fray, and in particular how vital it is to virtualize the network along with servers and storage in these infrastructures. And if three is said to be a trend, two is an emerging trend - observers expect more deals to come between large server and storage vendors, and network virtualization players, putting more pressure on networking incumbents such as Cisco to respond or defend.
It's early yet for that, though, some analysts believe. The network virtualization and software-defined networking market is still in its embryonic stage and Cisco is still in the catbird's seat as far as everything networking.
"Between (Cisco's) ONE (programmability architecture), and its (Nexus 1000v virtual switch), I think Cisco is covered for now," says Jon Oltsik, principal analyst at Enterprise Strategy Group. "In truth, data center competition is coming from Arista and Juniper, not the SDN guys -- yet. However I think Cisco will get much more aggressive on messaging/promoting its network virtualization technology. Look for Cisco to go to its base of customers and CCNEs with SDKs, use cases, further education, etc. It will play its cards often and try to maintain its installed base and mindshare advantages."
Cisco had no comment on Oracle's acquisition of Xsigo, which makes products that serve as an alternative to Cisco's Fibre Channel-over-Ethernet (FCoE) LAN/storage convergence switches and adapters. Of the VMware/Nicira union, a Cisco spokesperson stated:
"VMware, EMC and Cisco remain strategic partners, and will continue to shape the future of the data center together. A key aspect of our partnership is a shared focus on bringing greater programmability and flexibility to physical and virtual network and data center infrastructure via an open-standards-based approach. Cisco and VMware will continue working closely together toward that goal during the next phase of our partnership, as VMware expands its product portfolio through the acquisition of Nicira."
While it appears to be business as usual on that front, other major vendors are stockpiling their converged infrastructure arsenals, with systems and software folks nabbing the network virtualization pieces for this.
"It's becoming a game of stacks," says Zeus Kerravala, principal of ZK Research. "Oracle's not going to use this to steal share form Cisco. But if it was very tough to penetrate the Oracle (server and networking stack), this makes it tougher. It creates more of a closed market for the other guys."