Oracle snags cloud startup Ravello in deal said to be worth $500m

20151027 openworld oracle cloud signs
Signs at Oracle OpenWorld in San Francisco, seen on Oct. 27, 2015, highlighted the Oracle Cloud set of offerings. Credit: Stephen Lawson

It's all about flexibility in the cloud

Oracle is acquiring cloud startup Ravello in a deal reportedly worth $500 million.

Founded by the team that created the KVM hypervisor, Ravello sells what it calls "nested virtualization" software, with the goal of enabling enterprises to use popular public clouds as an extension of their own data centers. Essentially, the company's technology promises to let companies take any application environment and spin it up to the cloud on demand.

Oracle and Ravello confirmed the deal but did not disclose the price.

"Ravello will join in Oracle’s IaaS mission to allow customers to run any type of workload in the cloud, accelerating Oracle’s ability to help customers quickly and simply move complex applications to the cloud without costly and time-consuming application rewrites," Ravello's CEO said in a blog post.

Oracle said Ravello's employees will join it as part of its Oracle Public Cloud group.

As a late entrant to the cloud party, Oracle is now battling competitors such as Amazon Web Services and Microsoft Azure while trying to convince customers to sign up for its own cloud services.

Vendors often make acquisitions to gain technology they don't already have, but it's also not unusual to buy young companies to "take them off the table" and keep them out of competitors' reach, said Charles King, principal analyst with Pund-IT.

Both of those scenarios could explain Oracle's purchase of Ravello, King said.

With customers including Arista, Brocade, Red Hat, SUSE and Symantec, "the young company seemed to be doing pretty well on its own," King noted.

As part of Oracle, its offerings should "fit well within and help to extend Oracle's cloud solutions and services," he added.

"But it's also likely that Ravello would have complemented the cloud efforts of other enterprise-focused vendors, including IBM and HP," King said. "For the modest reported sum of $500 million, Oracle has ensured that it will be the sole benefactor of Ravello's innovations."

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