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I want to address some questions about VMware's NSX virtual networking announcement that have been asked of us by the media and social Web commentators in the past few days. Specifically, they have asked  why Cisco did not announce support for NSX and whether the announcement changes the long-standing strategic relationship between our two companies.

First, let me be clear: VMware is an important partner to Cisco, and we expect to continue our close collaboration around private cloud and desktop virtualization. As we outlined yesterday in a joint news release about Cisco and VMware's mutual customers, thousands of organizations rely on our combined innovation in their businesses each and every day and I look forward to continued success in this area.

While we share a common vision for private cloud and desktop virtualization, there are significant differences in our visions over the future of networking.

Network virtualization is important. We both agree on that. In fact, over the past several years, we have delivered game-changing innovations in this area particularly with the Nexus 1000v and more recently with NFV solutions, both of which are key elements of the Cisco ONE portfolio. Today, more than 6,000 Nexus 1000v customers benefit from the flexibility delivered by our virtual networking technology.

However, a software-only approach to network virtualization places significant constraints on customers. It doesn't scale, and it fails to provide full real-time visibility of both physical and virtual infrastructure.  In addition this approach does not provide key capabilities such as multi-hypervisor support, integrated security, systems point-of-view or end-to-end telemetry for application placement and troubleshooting.  This loosely-coupled approach forces the user to tie multiple 3^rdparty components together adding cost and complexity in day-to-day operations as well as throughout the network lifecycle.  Users are forced to address multiple management points and maintain version control for each of the independent components.  Software network virtualization treats physical and virtual infrastructure as separate entities, and denies customers a common policy framework and common operational model for management, orchestration and monitoring.

Cisco has a different strategy and that is embodied in the Application Centric Infrastructure.  Application Centric Infrastructure (ACI) is an innovative secure architecture that delivers centralized application-driven policy automation, management and visibility of physical and virtual networks.  It's built upon a fabric foundation that delivers best-in-class infrastructure by combining hardware, software and ASIC innovations into an integrated system.

The architecture provides a common management framework for network, application, security and virtualization teams - making IT more agile while reducing application deployment time.  It's built for multi-tenancy ensuring proper isolation and detailed telemetry of SLAs across different consumers of the infrastructure while also providing a consistent security policy across both physical and virtual applications.  ACI allows IT teams to offer a public cloud experience and economics to their customers while maintaining the associated SLAs and performance requirements for the most demanding business applications.  It's an open programmable architecture with a comprehensive set of APIs that enables the broadest ecosystem of datacenter management and L4-7 services.  Finally, ACI enables comprehensive investment protection by leveraging existing IT teams' skillset and infrastructure to lower overall TCO.

I recently wrote a blog post about how Network Virtualization is a Different to Server Virtualization as we think about the next chapter of networking.  It's key to remember that underutilized compute resources created the opportunity for server virtualization. Underutilization is not a problem in the network. In fact, server virtualization is pushing the limits of today's network utilization and driving demand for higher port counts, application and policy-driven automation, and unified management of physical, virtual and cloud infrastructures in a single system.  Businesses today are looking for more from their investments as they turn on new services and applications more quickly, in a way that is easier to manage and that can scale with applications needs.

We believe that delivering those benefits requires the flexibility of software coupled tightly with the performance and scalability of hardware and ASICs. That's what we're delivering with our Application-Centric Infrastructure vision and throughout the entire Unified Data Center portfolio.

Stay tuned for some exciting news from us in this area in the next few months.