Bloomberg reported Monday night that Cisco made a failed bid for the software-defined networking (SDN) company.
VMware Inc. (NYSE: VMW) announced a $1.26 billion deal for Nicira on July 23.
Why this matters
Bloomberg mentions Nicira in the larger context of the toughening competition Cisco faces. Systems vendors Arista Networks Inc. and Cyan Inc. also get cited as startups that offer alternatives to Cisco's equipment.
Cisco is trying to convince the world that it takes SDN seriously while also arguing that SDN -- which theoretically could create lower-cost alternatives to traditional routing -- isn't a threat. Cisco CTO Padmasree Warrior summarized the company's position in a blog recently. Analyst Tom Nolle of CIMI Corp. noted that the tone sounded defensive to him.
Cisco is nurturing its own SDN startup, the spin-in company Insieme ("spin-in" meaning Cisco intends to acquire it). But an interest in Nicira might suggest that Cisco sees some value in that company's concept of overlay networks.
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— Craig Matsumoto, Managing Editor, Light Reading