When companies scale to the size of global Internet services -- think Amazon, Facebook, and Google -- they need to manage a smorgasbord of legacy network devices, and do it all at web speed.

Startup Midokura is looking to solve those problems. Rather than the rip-and-replace approach of hardcore SDN, Midokora's MidoNet, which shipped about a year ago, is a virtual network overlay. (See Defining SDN & NFV.)

"It's not like you can walk into a data center and wipe out your existing network," says Daniel Conde, Midokura's director of products. "You have a physical network that hasn't been virtualized."

Figure 1: (Source: Santhosh kumar)

Designed for global cloud service providers, MidoNet creates a virtual network that sits on top of the service provider's existing network. Each tenant on a MidoNet network has its own virtual network with its own virtual switches and routers that connect their virtual machines. MidoNet is designed to improve customers' application deployment time, network scalability, and reduce application downtime, capex, and opex.

MidoNet differs from hardcore SDN in a couple of key ways. One is that it's a software-only approach -- classic SDN uses whitebox switches, but MidoNet works with the networking gear you already have.

And MidoNet, unlike classic SDN, doesn't use OpenFlow. "We're not saying OpenFlow is bad. It has its place," Conde tells Light Reading. It's suitable for small networks, but it doesn't scale -- routing tables fill up too quickly. Also, it requires specialized hardware.

MidoNet supports OpenDaylight, the Linux Foundation's SDN platform. Midokura is particularly interested in OpenDaylight's southbound software to manage switches, which is based on NETCONF, an Internet Engineering Task Force protocol for managing network devices. (See OpenDaylight Unveils Open-Source SDN Controller.)

MidoNet has demonstrated using a VTEP gateway from OpenDaylight to link apps running on physical devices to the virtual network. Some applications, such as databases and legacy applications can't be run virtualized -- the VTEP gateway is designed to allow those apps to connect with the virtual network. Midokura expects the VTEP gateway will likely be available in the third quarter.

And Midokura is also working on developing tools to allow network application managers to develop group-based policies, in collaboration with Cisco Systems Inc. (Nasdaq: CSCO), IBM Corp. (NYSE: IBM), Plexxi , and others. Application managers will be able to develop preconfigured security templates, such as PCI-DSS conformance for credit card processing. The group policy configuration tool is part of OpenDaylight, and developers hope to include it in the next release of OpenDaylight, Helium, due at the end of the year, as well as making a subset available in the OpenStack open source cloud platform.

Midokura is four years old, and received $17.3 million Series A funding in April, led by Innovation Network Corporation of Japan (INCJ), a Japanese public-private partnership, with other investors, including NTT Group (NYSE: NTT)'s venture fund, NTT Investment Partners; and NEC Corp. (Tokyo: 6701)'s venture Fund, Innovative Ventures Fund Investment. Staffing includes veterans of Amazon.com Inc. (Nasdaq: AMZN), Cisco, Google (Nasdaq: GOOG), and VMware Inc. (NYSE: VMW).

Midokura is a company worth watching, but it's got some potential problems. It faces stiff competition. Plenty of companies are pursuing the overlay approach for virtual networks,including Juniper Networks Inc. (NYSE: JNPR), VMware, and PlumGrid Inc.

Big Switch Networks also pursued the network overlay approach, but last year did an about-face and now follows the more traditional "bare metal" SDN approach, developing both hardware and software. New CEO Doug Murray says Big Switch needs to control both the physical and virtual networks to achieve necessary performance. (See Murray Leads Big Switch Into Bare Metal Battle.)

Moreover, even though MidoNet has been on the market about a year, Midokura was unable to provide Light Reading with even a single customer reference.

Faced with big opportunities and major challenges, it'll be interesting to see which way Midokura goes.

— Mitch Wagner, , West Coast Bureau Chief, Light Reading.

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Want to learn more about SDN and the transport network? Check out the agenda for Light Reading's

Big Telecom Event (BTE), which will take place on June 17 and 18 at the Sheraton Chicago Hotel and Towers. The event combines the educational power of interactive conference sessions devised and hosted by Heavy Reading's experienced industry analysts with multi-vendor interoperability and proof-of-concept networking and application showcases. For more on the event, the topics, and the stellar service provider speaker lineup, see Telecommunication Luminaries to Discuss the Hottest Industry Trends at Light Reading's Big Telecom Event in June.