Software: The New Networking Paradigm

VMware’s planned acquisition of Nicrafor $1.25 billion represents the evolution of networking beyond the hardware-dominated point of view that has sustained the industry for decades. On the same day Cisco said it would cut 2 per cent of its workforce,VMware said it would spend roughly 20 per cent of its cash buying a networking startup with around 100 employees. Those two seemingly unrelated moves are actually signposts in the journey to networking’s future.

Even as Cisco was detailing its restructuring, VMware punched it in the gut with this purchase, essentially telling its longtime partner that it can stick around for the ride but it will have to stay in the trunk. Meanwhile, the bevy of startups that have identified themselves as part of the software-defined networking zeitgeist are thrilled by the valuation and the events this deal will set in motion.

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