VMware is planning to acquire network virtualization software provider, Nicira in a deal valued at ab out $1.26 billion. Analysts say that the acquisition indicates that the company is moving to cater to the demands of the cloud based customers for platform support services. The Network Virtualization Platform (NVP) from Nicira is capable of creating abstraction layer between a physical network and the virtual switches that is deployed on hypervisor hosts.

The platform uses controller software and is capable of providing as well as managing network services on any hardware platform for virtual server workloads. The acquisition will allow VMware to fill the gaps in its cloud virtualization offerings and it will improve company's software-defined networking (SDN) offerings.

Analysts has said if VMware s able to successfully integrate Nicira into its product offering then it could emerge as a major player in the cloud management services segment. However, the company will have a tough challenge of integrating various services including vCloud Director, vCenter Operations Management, DynamicOps, Nicira and all other products together to offer seamless services to its customers.

VMware will strengthen its cloud based services with the acquisition. The Nicira deal is expected to close in the second half of 2012.