Hot on the heels of its acquisition of Sun Microsystems last month, Oracle announced today that it is buying server virtualisation management vendor Virtual Iron Software, on undisclosed terms.

Virtual Iron is said to enable dynamic resource and capacity management in virtualised data centres.

Virtualisation management is the next big frontier for the server virtualisation vendors, as the hypervisors themselves (which enable the physical server to appear as numerous logical servers) has been largely commoditised.

“Industry trends are driving demand for virtualisation as a way to reduce operating expenses and support green IT strategies without sacrificing quality of service,” said Wim Coekaerts, Oracle Vice President of Linux and virtualization engineering. “With the addition of Virtual Iron, Oracle expects to enable customers to more dynamically manage their server capacity and optimize their power consumption. The acquisition is consistent with Oracle’s strategy to provide comprehensive enterprise software management and will facilitate more efficient management of application service levels.”

Oracle said it believes customers will benefit from, “better capacity utilisation, streamlined virtual server configuration, and improved visibility and control of their enterprise software.”

Oracle of course has a virtualisation product of its own – Oracle VM. It said the combination of Virtual Iron’s technology and Oracle VM’s server virtualisation product is expected to provide more comprehensive and dynamic resource management across the software stack.

Virtual Iron focuses its product on the small to medium enterprise market, offering VMware Virtual Infrastructure-like features at a lower price. When ranked against Burton Group’s Hypervisor ranking criteria, Virtual Iron scored one of the highest results, just behind VMware, by meeting 83% of the required criteria. Where Virtual Iron falls short was said to be in its product lifecycle support policies and enterprise management infrastructure integration.

Virtual Iron targets small to medium businesses that may be willing to give up enterprise level support for a lower price, and who don’t need enterprise management integration. Of course that positioning may change now that it is able to draw on Oracle’s support teams.

Oracle’s acquisition of Virtual Iron may be one of the worst-kept secrets in IT: it was widely rumoured that a deal was imminent back in early March.