Last Thursday, just before the stroke of midnight, cloud-computing startup Nicira officially became part of VMware, new CEO Pat Gelsinger said.The $1.26 billion deal, first announced last month, is set to make VMware even more of a player in next-generation data centres, Gelsinger, a former Intel executive, told CNBC earlier today.
Gelsinger confirmed the closing of the deal at a keynote speech at the company’s annual conference, VMworld, happening in San Francisco this week.
The astronomical valuation given to this 100-employee startup shocked the enterprise world. Nicira only had a handful of customers.
VMware did the deal to own the biggest up-and-coming player in a new, superhot product category, software-defined networking.
With it, VMware strained relations with its partner Cisco.
Software-defined networking is about moving much of the “intelligence” of networks into software, rather than hardware. Hardware will still be needed, but less expensive commodity boxes can do the job.
It solves the problem of packing more servers onto networks while making them easier to move around. This is important for cloud-computing data centres.