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Backed by top-tier VCs such as Andreessen Horowitz, NEA and Lightspeed Venture Partners, network virtualization company Nicira has publicly unveiled its Network Virtualization Platform (NVP), a software-based system that creates a distributed virtual network infrastructure in cloud data centers that is completely decoupled and independent from physical network hardware.

Fresh out of stealth mode, Nicira has already attracted AT&T, eBay, Fidelity Investments, NTT and Rackspace as customers.

From the official company pitch:

NVP was designed to address the shortcomings of traditional networks by offering a platform that provides the operational model of a virtual machine. While applications have been decoupled from servers through compute virtualization, they have not yet been decoupled from the network through any type of scalable network virtualization. As a result, virtualized data centers face limits to what applications they can support and where the workloads can be placed.

These limitations restrict workload mobility, thus lowering resource utilization of servers, a primary cause of operational overhead. Legacy approaches can leave as much as 20%-30% of the server capacity in data centers under utilized and drive up networking costs several fold, based on Nicira’s work with the largest cloud data center operators.

NVP forms a thin software layer that treats the physical network as an IP backplane. This approach allows the creation of virtual networks that have the same properties and services as physical networks, such as security and QoS policies, L2 reachability, and higher-level service capabilities such as stateful firewalling.

These virtual networks can be created dynamically to support VM mobility anywhere within or between data centers without service disruption or address changes.

Will people really call it the ‘VMware of networking’, then? Likely.

NVP software is delivered through a usage-based, monthly subscription-pricing model, which scales per virtual network port. Customers only pay for what they use, and pricing scales accordingly.

Nicira was founded by networking research leaders Martin Casado and Nick McKeown from Stanford University and Scott Shenker from University of California.

The company has raised $50 million in funding to date, from the aforementioned venture capital firms as well as individual investors including VMware co-founder Diane Greene and Benchmark Capital co-founder Andy Rachleff.