The company's products have been deployed by companies including British Telecom, eBay, Softbank and Verizon.
The combination of Xsigo for network virtualization and Oracle VM for server virtualization is expected to deliver a complete set of virtualization capabilities for cloud environments.
Terms of the agreement were not disclosed.
"The proliferation of virtualized servers in the last few years has made the virtualization of the supporting network connections essential," said John Fowler, Oracle Executive Vice President of Systems. "With Xsigo, customers can reduce the complexity and simplify management of their clouds by delivering compute, storage and network resources that can be dynamically reallocated on-demand."
VMware last week said it would acquire privately held Nicira for $1.05 billion in cash to expand its portfolio and establish a leading position in virtualized networks.