VMware buys Nicira, aims for software-defined datacenter

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Virtualization and cloud-infrastructure developer VMware (NYSE: VMW) has acquired Nicira, a developer of software-defined networking (SDN) technology, for $1.05 billion in cash plus approximately $210 million of assumed unvested equity awards.

Nicira's Network Virtualization Platform allows companies to create virtual datacenters that can grow and shrink as necessary based on demand and are completely decoupled and independent from the physical network hardware--one of the core components of cloud computing. 

"VMware has led the server virtualization revolution, and we have the opportunity to do the same in datacenter and cloud networking," said Paul Maritz, chief executive officer of VMware, in a statement. 

Nicira also is one of the driving forces behind OpenStack, the open source platform that competes with VMware's vCloud Director. As coverage of the acquisition at Wired.com points out, "the politics of the situation are as complicated as the technology … VMware is realizing it must play nicely with open source software if it's to succeed in the all-important realm of cloud computing, where the likes of Amazon offer the world instant access to virtual computing resources over the net."

For more:
 - see the release
 - read the Wired.com story

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