July 23, 2012

2 Min Read
VMware-Nicira: Network Virtualization Meets Cloud Computing

By samdizzy


VMware (NYSE: VMW) has acquired Nicira to focus on network virtualization in the cloud. Nicira currently supports OpenStack (the open source cloud platform), and the company’s customers include AT&T, eBay, NTT and Rackspace. VMware says the $1.2 billion Nicira buyout will allow the virtualization giant to become the “industry leader in software-defined networking (SDN).”

But what exactly is SDN? Nicira says there are seven key priorities of network virtualization:

  1. Independence from network hardware

  2. Faithful reproduction of the physical network services model in the virtual space, including support for both physical and virtual workloads

  3. Follow the operational model of compute virtualization

  4. Compatible with any hypervisor platform (Talkin’ Cloud wonders: Will that remain the case under VMware’s ownership?)

  5. Secure isolation between virtual networks, the physical network and the control plane

  6. Cloud performance and scale

  7. Open, programmatic network provisioning and control

In a prepared statement, outgoing VMware CEO Paul Maritz said:

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

VMware’s CEO will shift from Maritz to Pat Gelsinger— effective September  1, 2012. The Nicira acquisitions surfaces just as VMware announces Q2 2012 results. Revenues were $1.12 billion, up 22 percent from Q2 2011 and net income was $192 million, down from $220 million in Q2 2011 but still above analyst expectations.

The Nicira buyout sounds promising but it also raises a few questions:

  1. What’s the potential upside for VMware channel partners?

  2. Will Nicira remain vendor neutral — or will support for third-party hypervisors and OpenStack fade away?

  3. How will the VMware-Nicira relationship potentially impact VCE — the VMware, Cisco and EMC relationship?

Talkin’ Cloud is seeking answers to those questions now.

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