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Oracle's Xsigo I/O virtualization buy concerns customers

Concerns for Xsigo customers in the wake of Oracle’s I/O virtualization purchase run from interoperability to integration.

Oracle intends to acquire I/O virtualization appliance maker Xsigo, which leaves Xsigo customers to deal with uncertainty about the future of the company’s product, pricing and support.

The acquisition, made for an undisclosed sum, was announced Monday and is expected to close this fall.

Oracle Corp. is mum about plans for future integration, except to say in an FAQ that Xsigo Systems Inc.’s product will continue to operate with non-Oracle systems.

Based on Oracle’s track record on interoperability with rival products, Xsigo customers are worried.

“We will have to wait and see what Oracle’s plans are, but I do not have a warm feeling about [this],” said Philip Schutte, a systems administrator for a global financial services company, which uses Xsigo’s product with VMware Inc. virtual machines. 

I do not have a warm feeling about [this].

Phillip Schutte

Oracle’s acquisition history also provides fertile ground for concern, said Greg Schulz, founder and analyst with the Server and Storage I/O Group.

“Look at other Oracle acquisitions like Virtual Iron – where are they now?” he said.

Oracle acquired Virtual Iron Software, Inc., a provider of server virtualization management software, in 2009, with the goal of giving its customers a complete stack of management capabilities for virtual and physical systems. A month later, Oracle killed the standalone Virtual Iron product line; a few pieces of Virtual Iron IP trickled out with Oracle VM 3.0, years later.

Worries are also justified among users who haven’t already invested in some sort of Oracle or Sun Microsystems Inc. product, and particularly those who have invested in Xsigo through its longstanding partnership with Dell Inc.

“Will [Oracle] allow customers to buy just Xsigo solutions, or will [customers] have to buy it as part of the Oracle stack?” Schulz said.

“The track record there runs toward absorbing things into the stack,” he said.

Others are nervous about pricing and support for Xsigo under Oracle.

One IT manager at a mapping firm said Oracle jacked up prices by 40% after buying Sun, causing his company to drop its products.

 “What will Oracle do with this?” said the IT manager, who requested anonymity. “I hope they've learned – they’ve come back to us hard on trying to get us to buy [Sun] hardware again and the pricing is in line, but I’m not going with anything proprietary unless I have to.”

Oracle could peel off certain features or software modules and start charging more for those, said Thomas Peacock, systems architect for SYS/TOMS Technology Partners, a managed services contractor working at New England BioLabs, which has two of Xsigo’s Fabric Directors.

Support may also suffer; Peacock has found Xsigo’s support top-notch, saying problems are resolved with high-quality service from start to finish with the same engineer, he said.

“You’re not dealing with starting with a Level 1 and being pushed to a Level 2 – I would be afraid of that ... when it goes to Oracle,” he added.

The upsides of Oracle’s Xsigo buy

While Oracle could increase the price or Xsigo’s product or let it “die on the vine,” there are upsides to consider, according to Aaron Branham, director of technology for Bluelock, a cloud hosting provider in Indianapolis, Ind. 

“The best case is the price stays where it is or goes lower and they increase product development,” he said.

Being part of a bigger company could improve quality assurance and help keep up the pace of new releases for the Xsigo product. For example, Xsigo has sometimes struggled to keep up with new software releases from partners.

“Every time a new [VMware] version comes out, [Xsigo] tends to lag a little bit ... so if you want to push the envelope in your environment, you have to wait for Xsigo to get to that point,” Peacock said. “And then there’s usually a few revs that you have to go through because of bugs and so forth, because they’re trying to rush the release.”

There’s also fertile ground for integration between Xsigo and Oracle’s existing products. Both vendors partner with InfiniBand and 10 GbE switch maker Mellanox, making a fit into Oracle’s Exadata systems potentially very easy.

“As a Xsigo customer and an Oracle customer, I’m looking forward to Oracle extending the InfiniBand network for high-performance computing,” said Jim Levesque, systems programmer for the Los Angeles Department of Water and Power.

Still, for companies such as  Oracle and its competitors to be successful, “they have to offer some advantage other than one throat to choke,” according to Bluelock’s Branham.

“I think the jury is still out on that piece.”

The Xsigo product has three components: Fabric Director, an InfiniBand switch appliance; Fabric Accelerator software, which virtualizes the connectivity between virtual machines and other nodes on a network, such as storage, other virtual machines and physical hosts, using software called Virtual Private Interconnect; and Fabric Manager.

The product can quickly provision networks, the better to keep up with the rest of a virtualized infrastructure, provide isolated layer 2 domains without the need to configure VLANs or switch ports, and reduce LAN and SAN cabling in the data center.

Beth Pariseau is a senior news writer for and Write to her at or follow @PariseauTT on Twitter.

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