Deployed as a virtual appliance, the firewall enforces individual security policies for VMs and controls inter-VM communication.Altor Networks yesterday launched Altor VF. It's a virtual firewall for the ESX platform. A virtual appliance is installed on each physical server. The appliance communicates with VMware's virtual switch to control communication among VMs deployed on the same physical server, as well as control inbound and outbound network connections.

Enterprises can deploy traditional firewalls at the data center edge to manage access to VMs running on physical servers, but those firewalls are blind to traffic among VMs. Altor's software removes that blind spot.

The software also can ensure that security policies migrate with VMs that are transported by VMware's LiveMotion to a new physical server. The software also maintains session states so that transactions aren't interrupted by a migration.

The company also announced that Altor VF integrates with Juniper Networks' IDP, Mazu Networks' network behavior analysis product, and ArcSight's security information management software.

The Juniper integration lets administrators configure the Altor VF to route traffic from the virtual machine to Juniper's IDP for packet inspection. With Mazu, the virtual firewall provides Netflow statistics to Mazu's software. Mazu uses network traffic patterns to detect unusual activity. Finally, the Altor software can ship syslog logs to ArcSight. The company says these integration deals aren't exclusive.

When asked if redirecting traffic to third-party intrusion prevention products might affect server I/O, CEO Amir Ben-Efraim said "You do introduce latency, which is why we are doing this based on policy." He says administrators can define which kinds of traffic to inspect. "You can just send port 80 traffic to Juniper," says Ben-Efraim.

Ben-Efraim sees a lucrative market for virtual firewalls. "People are talking about very large parts of the data center being virtualized. If security gets attached to 30% of those servers, it quickly hits $1 billion dollars."

Key markets include companies with PCI requirements to segment applications and servers that handle credit card numbers.

At present the virtual firewall only supports VMware's ESX platform. Ben-Efraim says Hyper-V and Xen Citrix support are on the drawing board.

Altor Networks was founded in March 2007 by former Check Point Software alumni. It has raised $7.5 million in funding. Backers include Accel Partners and Foundation Capital. You can see our Startup City profile of the company here.