Oracle acquires Sun.

This news has set the blogosphere and industry commentators alight. From convulsive prognostications of an open source apocalypse to giddy anticipation of a complete remaking of the enterprise IT marketplace, opinions, tea-leaf-readings and prophesies forecast nothing short of a tectonic plate shift in the industry.

While interesting and even thought provoking in some cases, such readings of the deal’s implications are all somewhat exaggerated and certainly premature. There are several reasonable ways in which Oracle may choose to handle Sun’s assets, many of which don’t imply a radical reshaping of the industry.

What is evident, however, is that IBM — Oracle’s chief strategic competitor — briefly raised the specter of gaining control of the highly strategic (to both companies) Java platform, then backed off. Oracle, likely in disbelief over their good fortune in having dodged a bullet, acted quickly and managed not only to secure Java, but in the process also bridged the key gap to a coveted IBM advantage: the ability to offer a consolidated hardware, software tuned to that hardware, and everything wrapped in a lucrative services vertical to enterprise customers.

IBM goofed. Oracle snuck one in.

As we sort through the implications, most discussion centers on the possible evolutions for Sun’s hardware business, the Java platform, and Sun’s open source portfolio, especially MySQL. Meanwhile, Oracle-Sun’s impact on the virtualization landscape has gone largely unnoticed.

Oracle and Sun are both deeply vested in open source virtualization. OracleVM and Sun’s xVM are both essentially re-branded, open source Xen. It’ll be relatively painless for Oracle to rationalize the two and promote a single, consolidated platform. And given Oracle’s preference for limiting certification of their software to only their own hypervisor, Xen is in all likelihood going to become the sole virtualization option for customers virtualizing Oracle products. This applies equally to Sun’s budding cloud effort … if Oracle decides to stick with it.

With the new Oracle-Sun megalith throwing its weight behind Xen, open source virtualization in the enterprise stands to benefit significantly. Oracle’s broad product portfolio tuned, certified and working on near-vanilla Xen will serve as a powerful testimonial for open source virtualization’s readiness for the enterprise

For the budget-constrained CIO of today, the increase in choice and flexibility this represents can only be a good thing.