VMware Touts NSX Customer Growth, Partners Say Security Could Be Killer Use Case

VMware said on Tuesday's fourth-quarter earnings call that it now has more than 400 paying customers for its NSX software-defined networking technology, and many of them are using it in production as opposed to just kicking the tires.

This means VMware has signed up around 150 customers since its last NSX update in October. Partners told CRN they think the uptick in sales is happening because VMware is now pitching NSX as a network security technology.

NSX has other benefits, like being able to configure virtual networks and provision apps quickly, but only large enterprises and service providers are ready to take advantage of these capabilities right now.

[Related: VMware's New Tech Shows Promise During Q4, But Shift To Cloud Could Bring Turbulence]

But NSX also can prevent an attacker who gains access to one part of a network from moving laterally once they're inside, and partners said this is causing customers that don't need high-end networking features to take a look.

Ron Flax, vice president at August Schell, a Rockville, Md.-based VMware partner that's involved in several NSX projects, said organizations that need strong security are finding NSX effective at protecting their networks.

"Micro-segmentation provides firewall protection to every network interface connecting virtual machines to the network," Flax said in an email. "It enables network engineers and security professionals to implement a zero trust security model."

The combination of NSX with VMware’s vRealize Automation software also makes it possible to automate delivery of VM workloads with complex network topologies, said Flax.

Still, a VMware partner who's been working on NSX projects told CRN the technology still has a somewhat narrow use case, even when security is factored in. NSX is also a complex technology that requires partners to undergo lots of training, he said.

But the potentially huge services opportunity that could one day materialize around NSX makes all this work worthwhile, said the partner, who requested anonymity because he also works with archrival Cisco Systems, which is developing a competing SDN technology called Application Centric Infrastructure.

"The good news is that VMware has a pretty much infinite pipeline of services that work with NSX currently, and we are grabbing as much of it as we can," said the partner.

VMware said nine out of its 10 largest enterprise licensing agreements in the fourth quarter included NSX. But one Silicon Valley, Calif.-based VMware partner told CRN he's skeptical of VMware's NSX customer claims because he's not seeing any actual deployments.

"I'd say that 400-customer figure is a bit inflated -- we haven't seen one customer using it," said the VMware partner, who requested anonymity. "I’m sure the product line is growing but I’d be shocked if it was at that pace."

VMware hasn't provided revenue figures for NSX, but last July said bookings had hit the $100 million mark. This week, VMware said NSX exited 2014 with a bookings run rate of more than $200 million.

PUBLISHED JAN. 28, 2015