Sun Microsystems (JAVA)

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Oracle, With Virtual Iron Buy, Boosts Data Center Offering
Date : 05/13/2009 @ 3:34PM

SAN FRANCISCO -(Dow Jones)- Oracle Corp.'s (ORCL) purchase of a small virtualization company is another signal from the database giant that it wants to be a serious player in the emerging fields of data centers and cloud computing.

On Wednesday, Oracle said it bought Lowell, Mass.-based Virtual Iron Software, Inc., for an undisclosed amount. The acquisition, which had been speculated about for several months, brings Oracle a suite of open-source virtualization tools and virtualization-management software.

The Virtual Iron purchase underscores the increasing importance to Oracle of being able to provide tools and services for data centers - server farms for heavy-duty computing. Though many customers can use this technology to host their data in-house, the move may also suggest Redwood Shores, Calif.-based Oracle is revising an earlier position on "cloud computing," a set of technologies that allow customers to access computing power and data from a computing vendor over the Internet.

In addition to Virtual Iron, Oracle agreed to pay $7.4 billion for Santa Clara, Calif.-based Sun Microsystems Inc. (JAVA), a deal that will give it the hardware specialization it needs to construct data centers for its clients.

Oracle declined to comment on the Virtual Iron acquisition. The company's shares, which are up 2.3% this year and outperforming the S&P 500 index, were down 1.4% at $18.12 in recent trading Wednesday, amid a lower overall tech market.

Buying Virtual Iron gives Oracle a key tool to help companies who are either building data farms or hosting their data offsite and accessing it on a pay-per-usage basis. Virtualization is important because it "tricks" computers into believing they have more computing power than they do, increasing the amount of computing power available on existing servers.