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    What VMware’s Nicira Buy Signals to Enterprise IT

    By
    Chris Preimesberger
    -
    July 24, 2012
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      VMware is the server virtualization software king of the world and has been for several years. Could this young company–still a teenager, by the way, at 14–now be on its way to becoming the external network virtualization king as well?

      Think about it. With a single strategic move, one company now has the potential to control the virtualization markets in two of the three key elements of enterprise computing: compute and networking. Only storage virtualization remains out of VMware’s market control at this point, and that may not be all that far away; VMware’s already deeply connected in that area, too.

      Some day in the near future we may look back on the July 23 acquisition of Nicira for a staggering $1.26 billion as one of the defining moments in this virtualization revolution.

      Nicira Also May Rescue VMware

      Why, you ask, is a little, virtually (no pun intended) unknown 5-year-old startup with little cash flow named Nicira such a key figure in this changeover? Because it is dedicated to software-defined networking, does it very well, and has earned trust and investment from the IT community in a short period of time.

      There’s another reason–a very important one at that–VMware spent all that cash in this deal: It missed the boat the first time it began developing software-defined networking, at least according to one knowledgable industry veteran.

      “VMware missed the boat on network virtualization, so they bought a startup despite the large price tag,” Delphix founder and CEO Jed Yueh told eWEEK. “It’s the classic story. Large, established vendors fumble their may into new markets. Even though VMware invested a great deal in developing network virtualization, they still failed to produce the architecture and features required for the market.

      “That’s the reason why they acquired Nicira for such a large dollar amount.”
      So, in view of slowing license revenue and new products that are taking more time than expected to drive significant revenue share, VMware was forced to make a move, Yueh said.
      Yueh, who started data deduplication provider Avamar in his late 20s and sold it to EMC in 2006 for $165 million, knows about virtualization. He started Delphix in 2008, developing a tool for database admins like no other in the market. Delphix’s product can virtualize several copies of a live Oracle database, enabling admins to patch, update or fix problems in the DB–and return them to the live instance–without affecting production. That’s gold to an IT department.

      What Other Boat May VMware Have Missed?

      Continued from previous page

      What Other Boat May VMware Have Missed?

      “So where else are they (VMware) missing the boat?” Yueh asked rhetorically. “They’re missing the boat on database virtualization, potentially a larger market than network virtualization. It’s no secret that the database market supports the world’s largest enterprise software company (Oracle). Their early efforts in this market have also missed the mark.”

      That’s a topic for another day, and we will discuss it here at eWEEK.

      Other networking companies do some types of network virtualization–namely, Cisco Systems, Jupiter Networks, Citrix, Vyatta and others. They all do internal network virtualization through VPNs and other secure data channels, but they’re all proprietary. To open control of these boxes to network admins would be to cut into their service profits tremendously.
      This is not the same as software-defined networking, either. Independent Nicira opens a previously locked door to better control of this data flow, offering an important alternative in this sector.
      With the addition of Nicira, which has built a virtual networking engine using open-source components, VMware now has its own virtual networking division by combining its VXLAN team with Nicira’s developers.
      The combination of Nicira and VMware will deliver agile, elastic and efficient resources (compute, storage, network, security and availability) on demand for a full range of customers, such as telcos, cloud service providers, enterprises and government agencies, VMware CTO Steve Herrod wrote in his blog.

      Everything in a Data Center is Virtualizable

      Everything is being virtualized now. Just about any piece of hardware in the data center can be abstracted in some way for more efficient use, and newcomers are generally coming with better ways to do it.

      Last week at an industry discussion meeting, eWEEK asked Allwyn Sequeira, CTO and vice president of cloud networking and security at VMware, if he could think of any data center component that hasn’t been virtualized. He couldn’t think of anything.

      Servers, storage, databases, even I/O has been virtualized. Networking is the last key component that has been held back, thanks to the so-called black boxes that currently rule the sector.

      Software-defined networking is a major departure from standard procedure in data centers. The firmware of network switches and routers–otherwise known as the control plane–traditionally has been a black box: locked, proprietary and kept under the control of the companies that manufacture those machines.

      Software-defined networking turns this old-school approach on its head to make the control plane remotely accessible and modifiable via third-party software clients, using open protocols such as OpenFlow. SDN is in large part about understanding and managing a network as a virtualized entity.

      Access and Portability are the Keys

      With this portability, SDN allows for quicker experimenting and optimization of switching/routing policies and for open access to the inner workings of switches and routers that formerly were closed. Basically, changes can now be made when necessary.

      Will VMware’s move corner the market and cause alarm? Probably not. But with this acquisition, VMware’s going to be hard to catch over the next few years in this sector.

      Chris Preimesberger is eWEEK’s Editor for Features and Analysis. Twitter: @editingwhiz

      Chris Preimesberger
      https://www.eweek.com/author/cpreimesberger/
      Chris J. Preimesberger is Editor Emeritus of eWEEK. In his 16 years and more than 5,000 articles at eWEEK, he distinguished himself in reporting and analysis of the business use of new-gen IT in a variety of sectors, including cloud computing, data center systems, storage, edge systems, security and others. In February 2017 and September 2018, Chris was named among the 250 most influential business journalists in the world (https://richtopia.com/inspirational-people/top-250-business-journalists/) by Richtopia, a UK research firm that used analytics to compile the ranking. He has won several national and regional awards for his work, including a 2011 Folio Award for a profile (https://www.eweek.com/cloud/marc-benioff-trend-seer-and-business-socialist/) of Salesforce founder/CEO Marc Benioff--the only time he has entered the competition. Previously, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. He has been a stringer for the Associated Press since 1983 and resides in Silicon Valley.
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