By David Krozier, Principal Analyst, Network Infrastructure Practice

On July 23 VMware, the server virtualisation powerhouse, agreed to acquire software-defined networking pioneer Nicira for $1.26bn; both parties expect the transaction to close in 2012.

VMware, a subsidiary of EMC, expects the acquisition to advance its progress towards programmatic control of virtualised compute, storage, and network resources – what it calls software-defined data centres.

Although Nicira’s current annual revenues are only in the $10m range, its technology complements VMware’s cloud strategy and will allow the combined entity to attack data networks with a comprehensive software-based cloud solution that is completely hardware-agnostic.

The acquisition certainly complicates the relationship between EMC, VMware, and longtime ally Cisco in providing virtualised infrastructure for cloud data centres.

While the companies have been long-term partners they also compete in the market, and Ovum expects the acquisition will end up polarising the EMC and Cisco camps …