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You are here: Home / Business Briefing / VMware Buys Nicira for $1 Billion
VMware Acquires Nicira's Software-Defined Networking for $1 Billion
VMware Acquires Nicira's Software-Defined Networking for $1 Billion
By Jennifer LeClaire / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
Not content to watch other software behemoths make billion-dollar moves, VMware has announced a blockbuster acquisition of its own that could potentially forward its leadership in the cloud space.

The virtualization company is paying about $1 billion in cash to buy Nicira, a company in the software-defined networking space and a leader in network virtualization for open-source initiatives.

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

A Natural Extension

Maritz's words may resonate with VMware customers and partners. Eric Chui, president and founder of HyTrust, said software-defined networking is a natural extension for VMware, and Nicira is a fantastic purchase.

"However, as networking gets virtualized and becomes part of the virtual infrastructure management layer, this expands the already 'god-like' privileges of the virtualization admins and puts all of the eggs in one basket," Chui told us. "This highlights the need for greater access controls and auditing to ensure against breaches, malicious attacks, and downtime from misconfiguration of resources."

It's like anything in the cloud: There are risks and rewards. VMware said customers leveraging the software-defined data center can have their own virtual data center with an isolated collection of all the compute, storage, networking, and security resources that they are used to. What's more, VMware said, the virtual data center can grow and shrink to use physical resources efficiently. But many will note Chui's security concerns, for which VMware has likely already accounted.

Supporting Open Principles

Nicira is clearly a frontrunner in software-defined networking, which enables the dynamic creation of virtual network infrastructure and services that are completely decoupled and independent from the physical network hardware. Industry leaders like AT&T, DreamHost, eBay, Fidelity Investments, NTT and Rackspace are using the Nicira Network Virtualization Platform to accelerate service delivery from weeks to minutes and dramatically reduce complexity and cost.

VMware plans to continue to support the open principles and technologies that have made Nicira solutions successful in the marketplace, including the Open vSwitch to connect physical networks and multiple hypervisors and the open extensibility framework to implement business-level policies from any cloud management system.

But Nicira will soon carry the VMware feel, expanding the firm's V networking portfolio, which includes VMware vSphere virtual switching, VMware vCloud Director networking, vShield Network and Security software defined services, and the VXLAN protocol. The Nicira acquisition will help VMware provide a full suite of software-defined networking capabilities and a solution lineup for virtualizing the network.

Ultimately, VMware said the Nicira acquisition will allow customers to create a pool of network capacity on top of any network infrastructure from which they can support tens of thousands of isolated virtual networks with the simplicity and operational ease of creating and managing virtual machines.

VMware expects the acquisition to close during the second half of 2012. The firm will be showcasing the software-defined data center at the coming VMworld 2012 in San Francisco Aug. 27-30.

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