A Citrix executive said that acquiring Nicira, the networking virtualization company bought by VMware for $1.2 billion, didn't make sense given the price and immaturity of the market. In addition, Citrix could forge a tighter partnership with Cisco as a result of VMware's move.
Speaking at a Pacific Crest investment conference, Mike Cristinziano, vice president of strategic development at Citrix, said Nicira was interesting, but didn't warrant the premium. Citrix may buy its way into the software defined networking market, but is choosing to hang back for a bit. Since VMware bought Nicira, Oracle has acquired Xsigo.
Cristinziano said that Citrix knows a lot about software defined network and its NetScaler software participates in the market. He added:
Nicira came out of some research at Stanford and we thought it was very interesting technology that had the potential to change how networking at the lower layers, layers 1 and 2 and 3, could change through the application of this new technology. So we invested.
And what we learned from the investment is there are a lot of bright people over there at Nicira, but also that it is very early in the maturity life cycle of the technology. As you know, VMware acquired the company recently for $1.2 billion and change. It is not an area that we felt we were ready to move into -- doesn't mean we never would years from now. But until the market gets a little more mature and at the price that was on the table it seemed to be not an attractive move for us.
That is really all I can say. At the same time we are pursuing a partnership strategy that will hopefully allow us to continue to partner with Nicira and other companies like it. An up-and-coming company, Big Switch, is in the space, we think they hold a lot of promise, some of the say DNA out of Stanford doing very similar things.
There are other companies in this space and there will be more now that we have had this big transaction. Our strategy is to partner with all those guys. But most importantly, people seem to forget that Cisco is the 800 pound gorilla in the lower layers of networking and a very good partner of ours and I'd say a less good partner going forward with VMware. That is my hunch anyway. So I think we can actually do more partnering with Cisco as a result of what could be viewed as a competitive move by VMware.