Small and relatively unknown internet companies are being bought over by bigger companies in the data center industry. The latest case in point is Nicira Networks. Nicira is a Silicon Valley start up that has almost no revenues to speak of and yet has been picked up by VMware for a sum of $1.3 billion. This 5-year old company’s success story has been made possible thank to the boom in cloud computing. For VMware, this acquisition is all about being able to complement its technology for helping large scale data centers automate their operations.
It will also help enhance goals like higher speeds and greater flexibility. The high purchase price is justified for it helps VMware be the early bird in new business spaces. The company may find huge payoffs to this thought process considering that data centers are increasingly relying on new software layers that help better use of storage, networking and computing resources.
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