VMware’s $1.26 billion acquisition of network virtualization startup Nicira in 2012 sent ripples through the tech world. Through the deal, VMware, which had made its name as a pioneer of server virtualization technology, planted a flag in the burgeoning software-defined networking (SDN) space that was roiling the traditionally staid networking market.
The deal also put the company at odds with partners like Cisco Systems, which itself was developing a strategy to address SDN and which threatened to upend the business of selling networking switches and routers that had made Cisco a very rich and high-profile tech vendor. It put VMware into greater competition with the established networking vendors like Juniper Networks and (then) Hewlett-Packard.
The Nicira deal gave VMware NSX, the network virtualization product that extended the company’s reach in the datacenter beyond servers and storage to the networking realm, which increasing was becoming a bottleneck. The benefits of virtualized compute and storage resources weren’t always fully realized because of the still heavily manual processes in the network. SDN – and soon after network-functions virtualization – began to change the equation in networking by separating the data and control planes, enabling programming and various networking tasks to be moved from proprietary hardware and into software that could run on lower-cost commodity servers. This was bad for traditional networking vendors like Cisco and Juniper, but for a company like VMware whose business was focused on putting datacenter resources into software, SDN was a good fit.
VMware quickly became a significant player in the SDN space due to the success of NSX. However, over the subsequent six years, as computing became more distributed, applications spread from central datacenters into the cloud and mobility increased, VMware expanded the capabilities of NSX into such areas as the cloud and containers, and later adopted a strategy of NSX Everywhere – the idea of using NSX to manage any virtualized networking environment regardless of the endpoints. The vision is one of moving NSX from product to platform that addresses everything from virtualization to management and security, and puts VMware into tighter competition with the likes of Cisco and its Application Centric Infrastructure (ACI) initiative and Juniper with its Contrail efforts.
VMware is continuing to see momentum behind NSX. License bookings grew 50 percent in 2017, NSX reached a run rate of $1.4 billion and there are more than 4,500 customers. The company also added another capability late last year when it bought software-defined WAN (SD-WAN) vendor VeloCloud, a move that extended its network virtualization reach beyond the datacenter and cloud into the branch office and network edge. In a conference call to talk about fourth-quarter financial numbers, VMware CEO Pat Gelsinger talked about the expanded demand for NSX.
“Clearly, the number-one use case continues to be security, but increasingly our NSX Everywhere strategy is broadening the use cases,” Gelsinger said on the recent call with Wall Street analysts. “It’s an integrated part of VMware Cloud Foundation, so it is our private cloud. It is an integrated part of the VMware Cloud and AWS, so it’s our public cloud. Our hybrid cloud service is based on NSX, so the hybrid cloud capabilities. We announced this quarter [the company closed the VeloCloud deal], an extension to the WAN, and we see that as a very powerful use case, because everybody is looking for branch transformation. How do they take costs from the WAN, how do they connect to SaaS services, how do they deliver new security models to the branch, how are they be able to enable that transformation of their all of the remote offices, et cetera.”
At the Dell Technologies World show in Las Vegas this week, VMware unveiled the NSX portfolio of products, which includes NSX Data Center (what had been the traditional NSX product), NSX Cloud, NSX Hybrid Connect and NSX SD-WAN by VeloCloud. The evolution of NSX from product to portfolio was a natural one given the trend of applications moving out of the datacenter and into the cloud, the subsequent need for a new IP-based network transport beyond MPLS, and the increasingly distributed nature of computing, according to Sanjay Uppal, VMware vice president and general manager of the VeloCloud business unit.
The portfolio is designed to support VMware’s Virtual Cloud Network vision of enabling organizations to create a fabric that will bring connectivity and security to applications and data throughout the network.
Most virtualized datacenter workloads run on VMware technology, and as apps moved into the cloud, VMware first tried to set up its own public cloud, which failed, Uppal tells The Next Platform. VMware last year sold its vCloud Air. The next step was to help organizations move workloads seamlessly between datacenters, private and public clouds, which focused on the network.
“That’s why extending what they’ve done with NSX and Nicira, which was very much a datacenter play – it was an SDN play, which meant the separation of the data plane from the management plane, more stuff in software, less stuff in hardware – so if you’re sitting next to the datacenter, it was all fine,” Uppal says. “There was no network to get across. But now let’s say you’re not sitting in the datacenter, you’re sitting in some remote location, how do you get from there to those workloads? That’s where the whole network comes in. That’s where taking what they’ve done in the datacenter for SDN and extending that out to SD-WAN fits very well together. That’s both from an economic standpoint – it’s the same economic driver – it makes sense from an architectural standpoint because it’s also the separation of the management and data planes … and it makes sense from a business standpoint because it’s a SaaS-oriented play. Yeah, you can buy on-prem if you want, but more and more companies just want to consume this as SaaS.”
With the introduction of the NSX portfolio comes some new capabilities within its components. The latest version of NSX Data Center adds extended support for containerized and bare-metal applications designed to bring more consistent networking services to all applications and deployment models. VMware also is trying to make it more attractive to telecommunications companies running NFV environments by adding accelerated workload optimizations for distributed workloads. NSX Cloud was released last year to bring consistent networking and security to both private and public clouds, in particular AWS. Now NSX Cloud will do the same in Microsoft Azure.
NSX Hybrid Connect enables businesses to create a networking fabric that interconnects datacenters and cloud environments leveraging the same governance and controls to make the migration of workloads from VMware datacenters to software-defined environments running on-premises, in the public cloud or in one run by a VMware cloud partner. NSX SD-WAN by VeloCloud brings similar capabilities to the branch and network edge and integrates with NSX Data Center and NSX Cloud to extend consistent networking and security polices from the datacenter though the branch and out to the cloud.
Uppal says being bought by VMware and becoming part of Dell Technologies opens up opportunities to expand the customer base for VeloCloud, which brought with it 2,000 customers. That includes not only tight integration with VMware products, but also those of other Dell companies, such as Pivotal and its Pivotal Container Service, which was announced last year and enables organizations to use Kubernetes in on-premises environments.
“We don’t have all the integrations done, but there’s a massive opportunity,” he says. “Pivotal is getting into Kubernetes and all that. This has relevance to [our work]. Then we have this NFV stack that VMware has built inside for telcos. Fifty percent of our business at VeloCloud comes from telcos, so now you have telcos deploy SD-WAN as a virtual network function that runs now on the VMware NFV service stack.”