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VMware to buy OpenFlow pioneer Nicira for £813m

Nicira helped define the emerging field of software-defined networking

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Continuing its push to virtualise all aspects of the data centre, VMware is acquiring software-defined networking firm Nicira for $1.26 billion (£813m), the companies announced on Monday.

"I believe we have the same opportunity to do for networking what we've already done for servers and many other parts of the data centre," Steve Herrod, VMware's CTO, wrote in a blog post about the deal.

VMware will fold Nicira's core technology, called Open vSwitch, into its own portfolio of virtual networking software, VMware said.

Nicira's software creates an abstraction layer between servers and networking gear, allowing organisations to decouple the network topology from the equipment, creating virtualised pools of networking capability. Its software supports a wide variety of network interface cards, switches, appliances, networking APIs (application programming interfaces) and fabric types.

VMware will encourage Nicira employees to continue working on open-source networking projects, it said. Some of Nicira's employees led the development of the OpenFlow software-defined networking protocol and were also involved with the OpenStack Quantum networking software.

VMware will pay $1.05 billion in cash plus $210 million of assumed unvested equity awards to purchase Nicira, which was founded in 2007 and is based in Palo Alto, California.

"VMware has enjoyed huge success and growth as a leading player in server virtualisation ... It simply can’t afford to miss out on one of the next big waves in infrastructure virtualisation - i.e. virtualising networks within data centre environments," said TechMarketView analyst Phil Codling.

"So, with this acquisition, VMware is also buying time. By stealing a march on the likes of Citrix and Cisco in SDN (software-defined networking), it hopes it can stay at the forefront of virtualisation software technology developments and hence market growth."

The deal is expected to close by the end of the year, pending regulatory approvals and other closing conditions.



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