VMware Acquires Software Defined Networking Vendor Nicira for $1.2 Billion

Virtualization giant extends its Software Defined Data Center Vision with new acquisition.

By Sean Michael Kerner | Posted Jul 23, 2012
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VMware is serious about the Software Defined Networking (SDN) market. To underscore that fact, VMware today announced its intention to acquire SDN vendor Nicira for $1.2 billion. VMware will pay 1.05 billion in cash and $210 million in assumed unvested equity awards.

Nicira is the leading vendor behind the Open vSwitch technology, which provides an SDN virtual switch. The vSwitch became part of the mainline Linux kernel in March as part of the Linux 3.3 release. Nicira is also the leading vendor sponsor behind the OpenStack Quantum networking project. OpenStack is a multi-stakeholder open source cloud effort backed by AT&T, IBM, HP, Dell, NASA and Rackspace, among numerous others. Quantum ushers in a new type of cloud-based networking model where the network can be fully virtualized.

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

Earlier this year, VMware's CTO, Steve Herrod detailed a broad approach to virtualization in the data center that he referred to as the Software Defined Data Center. It's an idea that looks behind just the core networking component that SDN looks at.

VMware is a lead advocate of the VXlan standard that aims to provide seamless layer two connectivity across a network. Allwyn Sequeira, vice president and CTO of Security and Networking at VMware explained to Enterprise Networking Planet earlier this year that SDN is a natural extension of VMware's current product lines, extending what they already have for a VMware domain.

"The value we bring to customers lies in our open approach and the richness of capabilities in network virtualization," said Martin Casado, co-founder and chief technology officer, Nicira. "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."

Sean Michael Kerner is a senior editor at InternetNews.com, the news service of the IT Business Edge Network, the network for technology professionals Follow him on Twitter @TechJournalist.

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