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Oracle quickly and quietly kills Virtual Iron

Oracle's acquisition of Virtual Iron has been reduced to a code base. There's plenty more of these quick shutdowns to come.

Oracle has decided to kill the Virtual Iron business and keep only the technology, according to a report in The Register.

Apparently, one month plus one week was enough for the database giant to float its latest acquisition into the dead pool.

While not surprising, this is an unfortunate situation for Virtual Iron customers and also feeds into BigCo sales tactics that tell customers to avoid buying from small companies. Oracle has long used the "bigger is better" sales tactic and this will falsely emphasize the perception that buying from start-ups and small companies is risky.

According to The Register:

In a letter to Virtual Iron's sales partners, Oracle says it "will suspend development of existing Virtual Iron products and will suspend delivery of orders to new customers." And in a second letter to a partner speaking with The Reg, the company says it will not allow partners to sell new licenses to anyone - including existing customers - after the end of this month (i.e. in 11 days). Before then, partners can only sell licenses to existing customers under certain conditions.

"Until June 30, 2009, Oracle may approve granting add-on licenses to existing Virtual Iron end customers, or licensing end customers who had demo'd or otherwise evaluated the former Virtual Iron products and do not require further delivery," the second letter reads.

Virtual Iron was certainly not a big dog like VMware or XenSource, but the company did hold a great deal of promise. In the acquisition announcement, Oracle described Virtual Iron as a "leading provider of server virtualization management software." Fellow CNET blogger Gordon Haff wrote that, in this instance, "leading" should be read as "on the roster but something like fourth-string backup quarterback."

As enterprise sales get harder to come by, there will be more of these types of deals. It remains to be seen if Oracle will do right by the customer and partner base, but I wouldn't bet on it.

Follow me on Twitter @daveofdoom