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VMware Nicira vs. Cisco Insieme: Virtualized Network War?

VMware's buyout of Nicira could position the virtualization giant against Cisco Systems and Insieme, The VAR Guy believes.

The VAR Guy

July 24, 2012

1 Min Read
VMware Nicira vs. Cisco Insieme: Virtualized Network War?

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VMware’s buyout of Nicira could position the virtualization giant against Cisco Systems and Insieme, The VAR Guy believes. The big question: How will competition heat up in an emerging market (virtualized networking/software-defined networks) even as Cisco (NASDAQ: CSCO) and VMware (NYSE: VMW) strive to cooperate on their VCE (virtual compute environment) partnership.

Here’s the background:

  • VMware has acquired Nicira for about $1.2 billion. The deal is expected to close later this year. VMware hopes to corner the market for virtualized networking in the cloud.

  • Meanwhile, Cisco Systems has invested $100 million to fund Insieme, which also competes in the software-defined network (SDN) market, and Cisco has the option to acquire all of Insieme down the road.

Back in April 2012, San Francisco Business Times said Cisco considered Nicira to be a real competitive threat. Now, VMware OWNS that competitive threat. Ironically, VMware and Cisco are also partnering on VCE, which is also backed by EMC and Intel. Just last week, a Cisco executive was named CEO of VCE.

So how exactly will VMware and Cisco balance their VCE relationship even as they potentially compete in the virtualized network market? That debate it just starting…

 

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