VMware Buys Nicira… and…

“The times, they are a-changin’…”
– Bob Dylan
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Today, VMware announced the price they’re willing to pay to get into the rapidly-growing Software Defined Networking space: $1.2 billion to acquire Nicira.

This underscores just how phenomenal the surge is that’s powering interest in SDN. The simple facts are irrefutable: Virtualization and Cloud have fundamentally altered compute and storage architectures, and networking now must adapt.

And it’s early. Recent research from Information Week highlighted many important points about the adoption of cloud. As it relates to networking, here are some key takeaways:

• 20% of customers surveyed have a cloud, and 30% more are planning theirs now
• Of that 30%, only 1/5th have designed their network architecture
• 80% are building clouds from individual components vs vendor bundles

I often get asked how I think the hardware networking vendors will weather this storm. While I have my thoughts, the fact is that question is laden with rear-view-mirror history… and I think the more interesting question is what looms out the front windshield. What I see:

1. Virtualization is driving massive change. Over 50% of the x86 installed base is now virtualized and this is causing major ripple effects.

2. System architectures are opening up.  Monolithic designs are giving way to modular ones.

3. Openness matters.  Modular architectures are defined by multiple interoperable elements.

4. Software is eating the world.  COTS hardware continues to demonstrate its ability to absorb different workloads.

Perhaps it’s ironic that on the day of this major acquisition that targets the future, Cisco announced another 2% cut to its workforce to “continue its restructuring plan.” You can’t shrink to greatness.

Which brings up a separate topic, which I’ll have to address later: How does the Nicira acquisition gum up the VMware / Cisco relationship?

In the meantime Vyatta will continue to grow our customer base of Enterprise and Cloud customers who have seen the brilliance of light shining from a network powered by software.