Oracle's virtualization death blow to Virtual Iron

Part of Oracle's virtualization plans are becoming clear, and it doesn't seem to include Virtual Iron partners or customers.

It was only about a month ago that I first started asking questions about the Oracle acquisition of Virtual Iron.  While back then it didn't make a lot of sense to me on the surface, I figured I would wait it out long enough until Oracle made their virtualization plans clear enough.

A month ago, Oracle said in a statement that Virtual Iron would continue to operate as a separate company, but only until the purchase agreement was closed.  After that, Oracle said it would provide more information on product direction.

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Back then, I offered up the idea that the sad news in all of this acquisition talk would be for existing customers and users of Virtual Iron's software.  Oracle didn't offer any assurances that it would continue to support the product once the acquisitions were complete.  And I noted that Oracle wasn't the sort of company to go to market with multiple competing products; they tend to favor their homegrown alternatives.

Fast-forward one month, and it looks like that notion was correct.  Things don't sound good for Virtual Iron's existing customer and partner base.  The Register has recently reported that Oracle is gearing up to kill off the Virtual Iron virtualization product.

In an official communication between Oracle and Virtual Iron partners, The Register quotes Oracle saying it "will suspend development of existing Virtual Iron products and will suspend delivery of orders to new customers."  The Register also reports that in a second letter, Oracle said it will not allow partners to sell new licenses to anyone, including existing customers, after the end of this month.  And even before then, partners can only sell licenses to existing customers under certain conditions.

Smells like disaster to me.  Why would those 2,000+ Virtual Iron customers continue to use the Virtual Iron platform if they can't grow their environment?  Would you?  The Register reported that in the same communication, Oracle said that when the new integrated virtualization platform was generally available, Virtual Iron customers would be able to move over to the new product.  But without any clear migration strategy or timeline in place, how many are going to stick around and play the wait-and-see game?  And an even bigger question might be, why would Oracle kill off a product from underneath customers before they have something else in place?

The Register's sources also claim that Oracle is only retaining maybe 15 of Virtual Iron's employees.  So again, this sounds like a technology-only acquisition.  Oracle doesn't seem to be too worried about keeping the staff for intellectual ideas.  And some of the staff being kept on is to maintain existing support contracts for the Virtual Iron product that Oracle is legally obligated to provide into January 2010.

Now we just have to wait and see what Oracle has in store for Sun xVM and the other Sun virtualization product lines.  Will they suffer a similar fate?  And will this announcement cause Virtual Iron's 2000+ customers to look to VMware, Microsoft, or Citrix for a new home?

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