VMWare today (well, yesterday) announced their decision to acquire small start-up Nicira. Nicira is an SDN vendor I had not heard of until now, but pundits attribute today’s 6% loss in Cisco’s stock to this purchase that apparently makes VMWare a competitor. (Earlier this week, Cisco had a big layoff too.)

Nicira states their sole mission is to “Virtualize the network”. Server virtualization decouples and isolates servers from the underlying hardware. Similarly, network virtualization decouples virtual networks from their physical components, allowing the physical network to do what it does best: forward the packets. The physical network then acts as a fabric, a pool of IP capacity, on top of which Nicira orchestrates and delivers the virtual networks and network services. This is accomplished via their Seven Properties of Network Virtualization.

Nicira’s flagship product is the Network Virtualization Platform (NVP). Nicria states NVP lets customers “simply and rapidly” program network services on top of the physical network, rather than directly configure one element at a time. NVP creates “dramatically better utilization of IT assets and data” by pooling components.

NVP creates an intelligent abstraction layer between end hosts and your existing network. Managed by a distributed controller system this intelligent edge transforms your physical network into a pool of network capacity and enables the programmatic creation of tens of thousands of isolated virtual networks to connect workloads in your cloud.

So the perceived underlying message is that VMWare is now a player in the burgeoning SDN market and will be directly challenging Cisco, who introduced their version, ONE, last month.