VMware to Buy Nicira Network Software for $1.26 Billion

Bloomberg BusinessWeek: Server virtualization vendor VMware has confirmed that it will buy Nicira Inc. for $1.26 billion--$1.05 billion in cash and $210 million of unvested equity awards. Based in Palo Alto, Nicira makes network virtualization software that reduces the need for networking equipment. “This is kind of a match made in heaven,” said ISI Group analyst Brian Marshall. “You’re taking a leader in virtualized networks and the gorilla of the dominant vendor in server virtualization.”

Founded in 2007, Nicira had raised $50 million in venture capital.