Nicira's main product is the Network Virtualization Platform, which is mainly software that runs on servers and gateways attached to a data center network. It provides a logical view and management of network resources, in much the same way that VMware's hypervisor and vSphere provide a logical view and management of compute resources. With NVP, customers can define logical virtual networks for specific workloads. The NVP virtual switches running on each server take care of implementing the virtual network on the physical hardware.
Nicira uses a distributed controller and requires no special networking hardware; it can use older two- or three-tier network designs or the new data center fabrics in vogue with most of the networking hardware manufacturers. Currently, Nicira talks of cloud management through either OpenStack or vSphere. Its marquee customers may manage some vSphere clouds, but it's likely that Nicira's primary use is in KVM and XenServer OpenStack environments. It's far too early to know how VMware will treat other cloud management environments, but we're betting this deal is giving pause to some of Nicira's largest customers.
While Nicira's software-only architecture fits perfectly into EMC and VMware's shared vision of a software-defined data center, that vision will likely be at odds with VMware partner Cisco--and even with many of EMC's own products. Both VMware and Nicira are working to build smarts into a software layer that in many ways makes low-cost commodity servers, switches, and storage systems perform acceptably for enterprises and service providers. In its product literature, Nicira speaks of its customers often preferring high-performance commodity switches over (one assumes) the high-priced, feature-rich products from the likes of Cisco.
With its recent executive shuffle (EMC infrastructure president Pat Gelsinger heads to majority-owned VMware as CEO, while VMware chief Paul Maritz heads to EMC as chief strategy officer), EMC seems to be embracing the notion that growth in sales and margins is likely to come from software-like private cloud management systems rather than from its traditional storage array and backup products. As it does so, it's creating an environment where commodity servers, storage, and networking will perform just as well as name-brand products. In many ways, this is exactly the opposite of what Hewlett-Packard, IBM, Dell, Oracle, and Cisco are doing.
The big four server vendors and Cisco are all working to create hardware stacks that implement private clouds with their own servers, networking, and storage gear. All are pursuing a "better together" strategy that encourages customers to buy a complete line of data center gear and management software from a single vender. EMC's "doesn't matter what's under the hood" strategy is particularly problematic for partner Cisco.
The strategies are divergent enough that we wonder about the stability of the VCE venture among VMware, Cisco, and EMC. VCE has some solid customers, but it has never quite taken off.
As the strategy unfolds, it also leads to concerns about EMC's dedication to its storage hardware business. We don't expect that it'll abandon its storage business anytime soon--or even slow its development. We see in poll after poll that IT pros value reliability and performance above all other features, especially with storage.
EMC has plenty to do within its own products to further its software-defined data center vision. Value-added services like deduplication from Avamar and Data Domain may embrace virtualization more strongly, or simply benefit from a more flexible network infrastructure. EMC's late 2010 purchase of Isilon indicates that the company saw the trend to scale out storage systems coming, and Isilon's OneFS software fits well into the software-defined vision.