One of the most anticipated debuts of a startup company happens today when Nicira, a maker of network virtualisation software, comes out of stealth mode.

Nicira was founded in 2007 and has raised $50 million (£30 million) from investors Andreessen Horowitz, Lightspeed Venture Partners, NEA and industry luminaries Diane Greene and Andy Rachleff. Greene is the co-founder of VMware and Rachleff is a founder of Benchmark Capital.

Nicira's business proposition is to virtualise the data centre network, as opposed to servers, so the network can become agile and portable to accommodate the mobility of virtual machines and workloads within and between data centres.

In essence, Nicira wants to do for the network what VMware did for servers: employ the same VM operational model so network segments can be moved around without disruption or manual intervention. Nicira officials say this will remove the last remaining bottleneck to dynamic, on-demand cloud computing, networks that are complex, vertically integrated, fragile and costly.

"The network is the barrier to the cloud," says Martin Casado, Nicira co-founder and CTO. "Network configuration is difficult" when VMs are mobile or when provisioning service to a new tenant. "It takes seven days to set up a network for a new application."

With virtualization, it should only take 30 seconds to prepare the network for a new application, Casado says. That's the goal of Nicira's Network Virtualization Platform (NVP), software that resides on virtual switches in servers in the data centre. NVP reproduces every characteristic of the physical data centre network, such as security and QoS policies, Layer 2 reachability and higher-level service capabilities such as stateful firewalling, and includes APIs to hypervisors and orchestration tools to coordinate operation with the virtual world.

It also includes an OpenFlow API to the data centre switch to be able to program them and separate control from the physical infrastructure. The API to the orchestration tools is the Quantum API in the OpenStack specification for open source-based cloud computing, which Nicira helped define.

Casado's work at Stanford led to the creation of OpenFlow, an enabler of software defined networking (SDN), which is a model many in the industry view as the next paradigm shift in networking. "This will be the biggest transformation in networking in 25 years," says Nicira CEO Steve Mullaney.

But the impact of SDNs on the network hardware industry, of which Cisco is the dominant vendor, will not be felt for another couple of years, Mullaney says. Eventually, network intelligence will be sucked out of the hardware and housed in controllers at the edge of the network, acting as the brains of a "cheap" Layer 3 IP switching fabric, he says.

Cisco is preparing for the emergence of OpenFlow and SDNs. The company has stated plans to add OpenFlow to its Nexus switches, but beyond that, its plans for either embracing or combatting the SDN trend are unclear.

NVP and SDNs treat the physical network as an IP backplane. This allows the dynamic creation of virtual networks that support VM mobility within or between data centres without service disruption or address changes, Nicira says.

Legacy approaches, the domain of Cisco, can leave as much as 20% to 30% of the server capacity in data centres underutilised and drive up networking costs several-fold, Nicira says. The company claims NVP can recover $20 million to $37 million in capital and operational costs for a large data centre of 40,000 services and 1 million VMs.

Nicira, however, has not yet calculated the economics of NVP on a network.

NVP is compatible with any data center network hardware, the company says, and can be deployed non-disruptively on any existing network. It also allows for future changes to the network hardware without disruption to the operations of the virtual network, Nicira says.

In addition to Casado, Nicira was founded by networking research leaders Nick McKeown from Stanford University and Scott Shenker from the University of California at Berkeley.