Oracle Corporation (NYSE:ORCL)’s latest acquisition of software-defined networking startup Corente would greatly threaten Cisco Systems, Inc. (NASDAQ:CSCO).

Oracle

Oracle announced its acquisition of New Jersey-based Corente for an undisclosed sum which is expected to be closed early this year.

SDN technology

The software-defined networking (SDN) would help facilitate replacing traditional, expensive network hardware sold by companies like Cisco Systems, Inc. (NASDAQ:CSCO) and Juniper with software. However, companies would still need hardware, though they could get away with less expensive versions.

Corente’s technology would replace traditional network hardware with a combination of hardware and software. Corente’s technology would help companies connect remote offices together or connect offices to the Internet and to other cloud computing applications. This technology is a part of networking called wide-area networks (WAN).

Oracle’s rationale for acquisition

In its statement Oracle Corporation (NYSE:ORCL) highlighted the fact that companies want to connect applications securely into private networks over the Internet and facilitate hybrid cloud services to seamlessly connect applications running locally into the cloud. However, many of these tasks currently require significant planning, acquisition and integration efforts, often requiring expensive networking technology and equipment that are often difficult to manage.

Oracle notes Corente’s proven deployments at leading enterprises and cloud service providers have dramatically decreased time to deployment of cloud-based applications and services and increased security and manageability across the enterprise ecosystem.

Oracle’s acquisition spree

As reported earlier, Oracle Corporation (NYSE:ORCL) completed eight deals in one year, including the acquisition of cloud greasing company Xsigo. This company extends a solution that virtualizes key networking companies, like switches and routers in an attempt to maximize efficiency.

Although Oracle Corporation (NYSE:ORCL) has already snapped up half a dozen smaller companies last year, rumor has it the company also has its eye on several other small and mid-tier cloud software players. Last month, it acquired Responsys Inc (NASDAQ:MKTG), a rapidly growing cloud marketing software company.

According to Julie Bort of Business Insider, with its latest Corente acquisition, Oracle has declared it will be competing in a young market that gravely threatens Cisco. It is felt with Corente, and Oracle’s acquisition of Xsigo last year, Oracle will compete in the SDN market. Interestingly, Cisco Systems, Inc. (NASDAQ:CSCO) has also to look over its shoulder at its close partner VMware, which is leading the charge in the SDN market. Soon, Cisco Systems, Inc. (NASDAQ:CSCO) will have to confront fierce competition from Oracle too.