Yesterday VMware announced their acquisition of Nicira, a 5 year-old company that has pioneered software-defined networking (SDN).

VMware will pay $1.26B to buy Nicira, a company that has built software that has done for networking what VMware has done to virtualize computing. Nicira was created five years ago and has raised $50 million from investors that included Diane Greene, one of the original founders of VMware.

It makes controller software that helps free the act of moving data and packets around a network from the constraints of networking hardware  – an increasingly tough problem inside highly virtualized and webscale data centers.

Nicira is a leader in networking virtualization for heterogeneous infrastructure environments and clouds. When combined with VMware’s networking team and technologies, this will mean the next step in creating cloud based solutions.

This acquisition expands VMware’s networking portfolio to provide a full suite of SDN capabilities and a comprehensive solution lineup for virtualizing the network, from virtual switching to virtualized layer 3-7 services. By buying Nicira, VMware has chosen a software-defined networking vendor that plays with open protocols such as Open Flow, but is still focused on keeping a proprietary edge to its business. That’s a similar strategy that VMware seems to be pursuing as well.

VMware has owned the software-defined-compute layer for several years now, with the release of vSphere 5 they added a software-defined-storage solution with the VMware Virtual Storage Appliance (VSA). With the acquisition of Nicira, VMware adds a software-defined-networking stack to their existing cloud solution, completing the stack, compute – storage – networking.

This complete stack combined will result in a software defined data center which is essentially a pool of compute and storage resources that are tied together with a software-defined-network which can span multiple locations so the physical hardware can reside in different data centers. The whole process is programmable and automated.

Cloud networking challenges

Cloud computing benefits from applications’ ability to move all around a datacenter. However, physical network topology limits workload mobility within the scope of a top-of-the-rack switch and a handful of servers. The industry clearly recognizes the need and opportunity to transform networking for the cloud, and thus to enable even more agility and efficiency in its operation.

Software-Defined Networking

To address these challenges, Nicira’s software-defined networking starts by virtualizing the network, decoupling the logical view of a network from its physical implementation. It does so by creating an abstraction layer between server hosts and existing networking gear which decouples and isolates virtual networks for specific networking hardware, turning it into a pool of network capacity. This enables the on-demand, programmatic creation of tens of thousands of isolated virtual networks with the simplicity and operational ease of creating and managing virtual machines.

Multiple Hypervisors and Multiple Clouds

The big discussion when talking about cloud solutions is vendor lock-in, so customers want multi-hypervisor support and even multi-cloud support. Simply said, customers want networking solutions that work across their entire datacenter, managing communication of both VMware- and non-VMware installations as well as physical hardware. Nicira’s software-defined networking does just that, but it is important to note that they are also the leader in network virtualization for heterogeneous hypervisor and cloud environments. They are major contributors to the networking capabilities of other hypervisors (via the Open vSwitch community) as well as to the “Quantum Project”, one of the key subsystems of OpenStack.

This may this VMware’s first step in enabling multi-hypervisor support in their products. Steve Herrod, VMware’s CTO, was very clear in his announcement. VMware is absolutely committed to maintaining Nicira’s openness and bringing additional value and choices to the OpenStack, CloudStack, and other cloud-related communities. It’s worth noting that this builds upon the openness delivered by our other recent acquisition of DynamicOps, a leader in cloud automation solutions for heterogeneous environments. It also builds upon our experience with the SpringSource community as well as our stewardship of the CloudFoundry Open Platform as a Service Project.


All combined, this is an exiting announcement which bring new opportunities and opens new doors. We will probably hear more on this at VMworld at the end of August.