For the past several months, eBay has been running a production cloud built on OpenStack. To clear a network bottleneck within this cloud infrastructure, eBay has virtualized the network using the Network Virtualization Platform (NVP) by Nicira, a company currently going through the process of being acquired by VMware.

VMware believes Nicira has the technology that will have a similar impact in network virtualization as VMware had in virtualization of servers. OpenStack is an open-source cloud architecture and operating system whose huge support for the IT industry indicates it will give proprietary cloud mainstays – Amazon Elastic Compute Cloud, Microsoft Azure and Google App Engine – a run for their money.

JC Martin, cloud architect at eBay, said Nicira’s network-virtualization technology removed the last big barrier between eBay and creating computing resources on-demand: the network.

“We can now provide these resources in a minute versus hours or days,” he said. “Not only do our best minds create new products and services more quickly, but we can also be more efficient and greener with our computing resources.”

What network virtualization does at its core is automate network management processes that become infinitely complicated in a cloud environment. It gives the multi-tenant network scalability, enterprise security, flexible workload placement and workload mobility, according to Nicira.

eBay engineers use the company’s cloud for research and development. Nicira technology allows them to quickly move R&D project from development and test into production in a matter of minutes.

Other companies using Nicira are Rackspace (also a key contributor to OpenStack), NTT, AT&T and Fidelity Investments.

VMware announced its intent to acquire Nicira for US$1.26bn (its largest acquisition to date) in July.