There's been some noise about the Nicira price tag, but VMware can afford it, and the synergy is clear: Nicira is to networking hardware what VMware was to x86 server hardware in that it splits the workload from the underlying hardware resources. Essentially, it brings virtualization to traditional networking hardware by separating the control and data planes, thereby using the hardware for what it's really good at--an IP backplane--while adding via virtual switches a software layer that brings management features, flexibility, and most importantly elasticity.
If you think Nicira's core Network Virtualization Platform product sounds a lot like OpenFlow, you're right. Nicira's founders invented OpenFlow, and the company is a big contributor to the OpenStack project; in fact, OpenStack uses Nicira's API for its network interface, and that practically makes VMware and Citrix close (if not kissing) cousins, as Citrix's CloudStack also has heavy roots in OpenStack.
But I digress.
In VMware's cloud computing vision, virtualization must be possible at every layer--compute, storage, and network--to facilitate automation and the orchestration of pooled hardware resources into meaningful virtual workloads. The network is the last bastion of resistance, yet it's also a critical component as we strive for global workload mobility.
And that's why the planned Nicira acquisition is such an important and strategic buy. This is clearly the technology that will lead VMware into sustained profitability and relevance in the enterprise and the cloud. It's also a direct threat to Cisco's core business, and I'll be watching to see how the company will react. It may try to buy Red Hat, but I'm not convinced that will help much. What I am convinced of is that it's high time for Cisco to think about reinventing itself.
VMware clearly gets that, despite the unprecedented success of its flagship virtualization product, it cannot ride the vSphere horse forever. Competitors, mainly Microsoft, are closing in--I see Hyper-V making inroads and quite possibly pulling even with or overtaking vSphere in the next two to three years. As a result, VMware has its eyes on the private cloud, hoping to carve out a stronghold in that emerging market. It's made a nice start. In the InformationWeek 2012 Private Cloud Survey, IT pros building private clouds were presented with a list of 18 vendors and asked which were key to their efforts. VMware led, with 54%. Cisco and Microsoft tied for second, six points behind. It's a slim enough advantage that VMware is smart not to open a second battlefront in the public cloud arena with the likes of Amazon, Google, and IBM. It's too risky right now.
In the private and hybrid space, on the other hand, VMware has a strong story. Besides Nicira, the DynamicOps acquisition provides orchestration and VDI-specific capabilities and is also heterogeneous, so it can support more than just the VMware virtualization stack, a capability VMware desperately needed. DynamicOps is VMware's bridge to the public cloud and to third-party virtualization and cloud platforms, and thus critical to its hybrid cloud strategy.
Competitors are trying to keep up on the reinvention track, with varying degrees of success. So far this year Citrix has bought Podio (cloud collaboration), Virtual Computer (client-side virtualization management), and Bytemobile (mobile data and video). Dell is well on its way too via its Clerity Solutions, Make Technologies, and Wyse Technology buys. HP has been struggling, while Microsoft is moving ahead in a calm, calculated, and methodical manner.
Cisco, which arguably has the most to lose, has been making some acquisitions here and there, but I get the sense John Chambers thinks there's no hurry. I disagree and think Cisco will be forced to accelerate the reinvention process as companies like VMware start to move in on its turf.
For IT, it's extremely exciting watch our industry reinvent itself, with vendors scrambling to realign and remain relevant and profitable. I can't wait to see who comes out on top when the dust settles.
Which companies do you think have the clearest strategies and why? Tell us in the comments.
Elias Khnaser is the CTO of Sigma Solutions, a vendor-independent systems integrator focusing on mobility, cloud, and big data. Follow Elias on Twitter: @ekhnaser.