VMware Buys Nicira in $1.2 Billion Embrace of SDN

This graphic provides an overview of how Nicira software creates a network virtualization layer to make it easier to manage virtual machines. (Source: Nicira)

VMware will buy Nicira, a leading player in software defined networking (SDN) for $1.26 billion in a bold move to boost its position in data center networking. Nicira’s software platform manages a network abstraction layer, which lets users create virtual networks that operate independently of the underlying physical network hardware.

The company was founded by key players in the development of the OpenFlow protocol for software-defined networking. Current users of the Nicira Network Virtualization Platform (NVP) include AT&T, DreamHost, eBay, Fidelity Investments, NTT and Rackspace.

“VMware has led the server virtualization revolution, and we have the opportunity to do the same in datacenter and cloud networking,” said Paul Maritz, chief executive officer, VMware. “The acquisition of Nicira adds to our portfolio of networking assets and positions VMware to be the industry leader in software-defined networking.”

“The combination of Nicira and VMware brings together two pioneering teams, and gives customers the industry leading SDN solution for any cloud environment, on any hypervisor in the enterprise and with service providers,” said Martin Casado, co-founder and chief technology officer, Nicira. “The value we bring to customers lies in our open approach and the richness of capabilities in network virtualization.”

Nicira has been a leading player in the open networking movement, contributing to networking technology in two open source cloud platforms, OpenStack and CloudStack. VMware said it plans to continue to support these commitments, including the Open vSwitch to connect physical networks and multiple hypervisors.

“I can imagine skepticism as to whether we will continue this substantial embrace of non-VMware hypervisors and clouds,,” VMware CTO Steve Herrod wrote in a blog post. “Let me be clear: we are absolutely committed to maintaining Nicira’s openness and bringing additional value and choices to the OpenStack, CloudStack, and other cloud-related communities.” Herrod said the company’s commitment to openness had been demonstrated in its experience with the SpringSource communityand its stewardship of the CloudFoundry Open Platform as a Service Project.

This acquisition expands VMware’s networking portfolio, which includes the VMware vSphere virtual switching, VMware vCloud Director networking, vShieldNetwork and Security software defined services, and the VXLAN protocol to provide a full suite of software-defined networking capabilities.

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About the Author

Rich Miller is the founder and editor at large of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.

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  1. The SDN race is really in full stride. While VMWare and Citrix are the obvious virtualization leaders, our question is how far DELL can potentially rise above CISCO as CISCO begins to put on the brakes.

  2. kafantaris

    With everybody else falling asleep at the network switch, VMware and Nicira have cornered the virtual server market and thus became indispensable to cloud-based services. But up to now these two had at least each other to compete with. This has assured both strong development in virtual controllers and servers as well as fair pricing. Now, however, the two are about to become one. With everybody else lagging far behind, they will be able to not only monopolize the virtual server market, but also annihilate the old hardware-based switches from Cisco and company. "So what," you say. "Survival of the fittest." Not so fast. With the Cisco hardware obsolescence will come a dependency on virtual controllers and servers. This is not bad in itself since they streamline the setting up and maintenance of networks. But it can be bad if the virtual controllers and servers take hold to the exclusion of everything else. Aside from the inherent monopoly in this, we will also have a dependency on a networking platform -- which though efficient, economical, and ingenious -- has nonetheless not been around long enough to warrant a complete reliance on it. A go-slow approach, therefore, might be in order and the Justice Department perhaps ought to look at all the ramifications before it gives its blessing to VMware to buy Nicira. Besides, the two companies have already worked out the necessary protocol to coexist in networks -- without being the same entity. Staying that way might be better for all of us for the time being.