Network Virtualization Companies
VMware has spent 1,050 million dollars in cash and 210 million in shares to buy Nicira, a company specializing in network virtualization company. The move follows the change of VMware in search of a data center where physical infrastructure assets are completely abstract and automated. And where the provisioning and management of all data center resources are made via a sophisticated software, known as “data center software defined” vision.
Although Nicira is credited with some high profile clients, Paul Maritz, the outgoing CEO of VMware, said the company did not expect its largest acquisition to date was to significantly improve the incomes of 2012.
“We do not expect a significant contribution in revenues this year,” Maritz said about the agreement in the presentation of financial results for the second quarter of the company. “This acquisition was made by its strategic value, as opposed to its current value of income.”
Judging by the price they have paid, it is obvious that, as he added, “we believe that this is the greatest strategic importance to move forward.”
The acquisition fits into the overall strategy of three layers of VMware, consisting of new approaches for the development of software applications that respond to the current reality, give support to users in the “post-PC world multi-devices” and redo the data center as it becomes increasingly defined by software.
The solution Nicira software defined networks fit into this third layer. Its technology abstracts the physical network infrastructure, allowing the user provision resources and virtual network services.
The solution automates network management hardware. “Automation” is another key word for VMware.
“Ultimately, it comes to automation,” Maritz said. “After all, we are in the business of data center automation, and to be there, you have to be able to speak automation of all key data center functions.”
VMware Nicira considered as a leader in its segment, he said. The CEO virtualization giant said a good indicator that the technology was already mature is the adoption of its products by a large number of service providers and large enterprises.
Nicira among customers who are service providers include Rackspace, AT & T, DreamHost and NTT, while among companies using their network virtualization solutions are eBay and Fidelity Investments.
All these companies exemplify the two types of customers who are currently leading the adoption of software-defined networks. They are service providers with an immediate need to solve their problems bottleneck on the one hand, and businesses adopting the solution to anticipate network problems in the near future, said Maritz.