Oracle's Latest Acquisition Should Be Making Cisco Very Nervous

Oracle has bought New Jersey-based Corente for an undisclosed sum and that purchase should make Cisco stand up and take notice.

With this acquisition, Oracle has declared it will be competing in a young market that gravely threatens Cisco.

There is a movement to replace traditional, expensive network hardware sold by companies like Cisco and Juniper (mostly Cisco) with software. It's a concept known as software-defined networking (SDN). Companies still need hardware, but less of it and less expensive versions.

Corente offers a technology that replaces traditional network hardware with a combination of hardware and software. Companies use Corente's tech to connect remote offices together or connect offices to the Internet and to other cloud computing applications. It's the part of networking called wide-area networks (WAN).

Plus, companies don't have to buy the Corente equipment themselves. They can order it as a cloud service and pay for it on a monthly subscription.

With Corente, and Oracle's acquisition of Xsigo last year, Oracle will compete in the SDN market it says in the documents announcing the acquisition:

Oracle and Corente are expected to deliver software-defined networking offerings that create cost-effective, secure networks, spanning global deployments. Together, Corente and Oracle are expected to deliver a complete technology portfolio for cloud deployments with SDN offerings that virtualize both the enterprise data center LAN and the WAN.

Cisco already has to look over its shoulder at its close partner VMware, which is leading the charge in the SDN market. Soon, it will have fierce competitor Oracle to contend with too.