VMware announced its network virtualization platform today based upon its own internal technology with Nicira, which it acquired last year.

NSX is a network hypervisor that abstracts the server. It exposes virtual networks, but they have the capability to be programmed, similar to virtual machines. But it’s also still very new. In 2009 and 2010, there were more virtual loads than physical workloads running inside data centers. Now the number of virtual ports is scaling in comparison to physical ports.

The advent of network virtualization comes as more companies face unprecedented volumes of data on its networks. To manage that rush of data, companies need to program their infrastructure. Physical networks are a bottleneck to that capability.

Network virtualization is a new concept for IT. Customers onstage at VMworld, VMware’s annual user conference in San Francisco, said today that it can’t be treated as something that a company just does — the focus instead needs to be on the problem the customer is trying to solve.

The news is noteworthy for, if nothing else, how a company like VMware has split to some degree with Cisco, its long-time networking technology partner.

But the move is inevitable to some degree as the world gets eaten by software. Still, VMware faces deep competition in this space, especially from the likes of Cisco, which is becoming a server vendor, as well as Microsoft, which, in addition to being a Cisco partner, has been very aggressive in reducing the cost of its Hyper-V virtualization technology.

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