VMware buys cloud infrastructure player Nicira Inc for US$1.26bn in cash and equity

24 Jul 2012

In a move that delivers a major windfall for top Silicon Valley venture capital player Andreessen Horowitz and then some, EMC-owned virtualisation giant VMware has acquired cloud firm Nicira Inc for US$1.05bn in cash plus an additional US$210m in equity.

IT architecture player Nicira Inc is a pioneer in the area of software-defined networking, as well as network virtualisation for open-source initiatives. Its technology is also instrumental in the realm of agile computing and allowing data centre providers to grow and shrink resources as needed.

The boards of both companies have approved the acquisition and now it is subject to regulatory approval.

“Nicira helps customers dramatically improve business velocity and efficiency by transforming how networking works in the cloud era,” said Steve Mullaney, chief executive officer, Nicira.

“I’m thrilled to be joining forces with VMware to help build the software-defined data centre.”

The future of virtualisation and the cloud = scalable networked intelligence

The acquisition expands VMware’s networking portfolio and will allow its customers to create a pool of network capacity on top of any network infrastructure to support tens of thousands of isolated virtual networks.

“VMware has led the server virtualisation revolution, and we have the opportunity to do the same in data centre and cloud networking,” said Paul Maritz, chief executive officer, VMware.

“The acquisition of Nicira adds to our portfolio of networking assets and positions VMware to be the industry leader in software-defined networking,” Maritz said.

According to Fortune, the acquisition will return US$250m to US$300m to Andreessen Horowitz’s original 2009 fund that has invested in Skype and Foursquare.

Enterprise image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years