VMware Buys Nicira: Start Of Networking Wars?

VMware is expanding its virtualization stronghold in the data center by plunging into networking with its announcement that it will acquire Nicira, a three-year-old, 100-employee startup, for a premium $1.26 billion.

Nicira, with the OpenFlow networking protocol, is tackling one of the largest remaining problems in virtualizing the data center: giving the enterprise network the same flexibility and moldability as the virtualized servers that it's attached to. Instead of continuing to load the network with devices already wired with fixed message routes, Nicira advocates putting more programmable intelligence into the network control plane and configuring and reconfiguring devices to dynamic traffic patterns. That's a nice fit with VMware's previously announced goal of establishing the software-defined data center.

Can VMware move network control out of the hands of network device makers and up into the virtualization layer? Apparently, it believes with Nicira it can.

VMware CTO Steve Herrod said in an interview that the move was not disruptive. Existing partnerships, including its partnership with Cisco Systems, will continue as before, he said. Still, VMware as the owner of a promising networking startup is a different sort of partner. For several years, VMware has cooperated closely with Cisco for its next step in virtualized networking. Cisco was the first to implement an extension of the VMware hypervisor's vSwitch, the Virtual Distributed Switch, into an efficient Cisco Nexus 1000. That move offloaded switching responsibilities from VMware software into Cisco's Unified Computing System hardware.

The two also align their strategies through a subsidiary, Virtual Computing Environment, a supplier of Vblocks, integrated, virtualized rack servers, storage, and networking. Vblocks are purchased by companies that wish to plug in racks of servers upon receipt of a shipment and quickly establish cloud data centers. VCE also includes VMware owner EMC.

The purchase of Nicira "certainly doesn't" displace Cisco, Herrod said in the interview.

VMware already established VXLAN as a core approach to virtualizing networks before the Nicira acquisition, again with the help of Cisco. VXLANs treat the network as a generalized pool of networking capacity that can logically span existing physical barriers, connecting different clusters, or even geographically distinct data centers, according to information on VMware's website. The pool can then be divided up and assigned to virtual domains hosting virtual machines.

[ Learn why Nicira may play a key role in enabling greater automation of the software-defined data center. See Nicira OpenFlow: Networking's Next Big Thing? ]

Nevertheless, the acquisition of Nicira will thrust VMware into the networking arena in a way that sooner or later could bring it into more direct competition with Cisco.

Through Nicira technology, VMware will seek to enable provisioning virtual machine networking from vSphere 5, which will be located at multiple points in the data center, including the network's edge. Cisco, on the other hand, believes network intelligence belongs on centralized Cisco switches and routers, managing other Cisco devices.

Nicira founder and CTO, Martin Casado, said Nicira isn't just about OpenFlow. "If you zoom out from the perspective of the server, you see a mix of hypervisors and networks in the data center. We embrace the fact that it's a heterogeneous world." In other words, VMware isn't seeking to displace existing networks with OpenFlow, rather to superimpose a programmable network provisioning on top of its virtual machine generation.

Such provisioning must be able to adapt to existing, underlying networks, such as the storage networks Infiniband and Fibre Channel as well as TCP/IP and Ethernet communications.

That also means the VMware-Nicira combination will need to build out programmable network provisioning, then make it work with a variety of existing network protocols. Some virtual machine provisioning will occur at the edge of the network, not at the Cisco-oriented central switch. That means VMware virtual machine provisioning will also have to be able to deal with such protocols as the tunneling mechanism, Generic Routing Encapsulation, or VMware's vShield security protocol.

"The Nicira acquisition will make the Cisco-VMware relationship much more of a competitive one," said John Vicenzo, VP of marketing at Embrane, seconded by CEO Dante Malgrino, a 10-year veteran of Cisco, working on Catalyst 6500 switches, in an interview.

"We believe we are in the beginning of the war between physical switch vendors and hypervisor switch vendors," said Kyle Forster, co-founder and product manager of Big Switch Networks, another OpenFlow switch startup, in an email message. Forster is also a long-term Cisco veteran who teamed up with CEO Guido Appenzeller, leader of the Clean Slate Lab project at Stanford that produced the first OpenFlow specification.

When stated that way, Cisco clearly falls into the physical switch vendor category.

VMware's move will heighten tensions elsewhere, depending on what happens to Nicira's continued sponsorship of the Open vSwitch open source code project. For example, Citrix includes the Open VSwitch in its XenServer product. It would be likely to find it intolerable for a component of its server to fall under direct VMware control and development.

In its announcement, VMware attempted to assure users of Nicira's open source code that all would continue as before. "VMware plans to continue to support the open principles and technologies that have made Nicira solutions successful, including the Open vSwitch," its announcement said.

VMware is paying a premium to get Nicira--$1.05 billion in cash and $210 million in unvested stock, probably intended as pay incentives for existing and future employees. The deal is expected to close in the second half.

"The price tag alone signals how valuable new, innovative control planes will be," concluded Forster.