Martin Casado, CTO and co-founder of Nicira

Nicira, the not-so-stealthy-but-seriously-hot networking startup is ready to tell the world what it offers and who is buying its software. The list of customers is impressive. Nicira’s Network Virtualization Platform is used at eBay, NTT, AT&T, Fidelity Investments and Rackspace, and I expect more companies to announce their use of the networking virtualization solution in the coming months.

Nicira, the brainchild of Martin Casado, who gained fame in networking circles after his Stanford dissertation became the basis for the OpenFlow protocol, is backed with more than $ 50 million in funding from Andreessen Horowitz, Lightspeed Ventures and New Enterprise Associates. Diane Greene, the co-founder of VMware (s vmw) also contributed. Nicira’s founder, its funders and the technology space where it plays make it one of the hottest startups around.

The problem with virtualization.

Nicira is one of several companies attempting to solve the problem that Greene helped create when she co-founded VMware to push hypervisors and virtualization. Once servers were virtualized, it created an easy way to separate computing from the physical infrastructure. The benefits of server virtualization were more agile compute infrastructures — a developer would spin up a server in minutes as opposed to waiting days for approvals — as well as consolidating IT. Storage followed, but holding the whole virtualized infrastructure effort back was networking. Like a bird with its wings clipped, IT was tethered to the physical hardware by networking.

Server virtualization has made moving applications around on top of servers easy — think of the transient nature of Amazon’s EC2 instances. But the challenges of maintaining the connection those servers must have to the underlying network has chained the cloud to physical infrastructures — to an IP address — and ensured that employees must manually reconfigure the network to make big changes or implement new networking policies associated with security or compliance. Solutions such as OpenFlow, a protocol that allows the suer to separate the intelligence inside switches from the packet routing, and place that intelligence on commodity servers, has helped usher in the age of software-defined networks, which could help solve that problem.

Nicira’s secret sauce.

Nicira’s products play into that, but don’t require OpenFlow to work. Instead of requiring a special OpenFlow-enabled switch, its software works with a variety of protocols and hardware. The company starts by using the Open vSwitch network virtualization software inside the hypervisor. From its vantage point inside a VM thanks to Open vSwitch, Nicira understands data associated with that VM and communicates it to controllers running its software inside the data center.

These controllers are the data center equivalent of a Post Office box for each VM inside the data center. While the physical address of a virtual machine may change depending on demand, the Nicira controller knows where that VM is and can get messages to it. So, now, messages are sent to the controller and like mail sent to a PO box, the recipient gets it, no matter where she may physically live.

Agility, cloudbursting and follow-the-sun data centers, oh my!

The infrastructure is worth explaining, but the real excitement is found in how Nicira’s customers are using the product. NTT, which operates data centers around the world, uses Nicira’s software to move its desktop-as-a-service offering from data center to data center within Tokyo ahead of rolling brown outs in the wake of the Fukushima nuclear disaster. That’s right, we’re talking about cloudbursting — or moving a workloads on the fly from one data center to another. Of course, many caveats still apply.

Both data centers need Nicira controllers, as well as the data the application needs to use in order to run. Casado also notes those data centers also need to be connected by pretty fat pipes with low latency to deliver something like NTT’s desktop-as-a-service application. However, customers could use it for cloudbursting if they have already pre-populated a second data center with the information the application needed.

E-commerce giant eBay is using it to deploy applications in minutes as opposed to days, since network engineers no longer have to manually configure networks to meet the needs of a developer. Rackspace is using it to change the products it can offer as a hosting company, as well as add agility to its infrastructure-as-a-service offerings.

While Nicira’s coming out party is a big deal for the new age of networking, it is by no means the only player seeking to free cloud computing form the confines of the physical network. Startups such as ConteXtream, Embrane, Big Switch and others are seeking to play a role in the networks of tomorrow. With customers having tested and deployed its platform into production environments, five-year-old Nicira seems further along than some of its fellow startups, but this is a big opportunity and there’s still plenty of room.

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Does your kid want to play with unicorns? You should check out next week’s Toy Fair in New York, where toy makers are converging with the latest-and-greatest augmented reality technology that brings once-static games, books and toys to life. With augmented reality, a kid viewing a book or game though an iPhone, iPad, web cam or other connected device, will see and hear animated characters that were once flat on the page.

The proliferation of these products shows that augmented reality, a technology which has a conference of its own, is going mainstream as more people carry smartphones, are always connected and want the latest and greatest experience.

San Francisco-based Nukotoys will be on hand to show off NUKO trading cards, which pop with animated monsters when viewed through an iPad, iPhone or iPod. The Monsterology cards, now in beta, will let kids collect, trade, train and play with 3D unicorns, cyclopses and sea serpents, the company said.

Digital Tech Frontier will show off its new Popar book line. The books are encoded so that a user with a webcam and a PC, will see 3-D, moving images — rocket ships blasting off, planets spinning, etc. — as they read.  (See video here.)

Other AR-adopting toy makers include Character Options, which is using the technology in its new Appgear shown at the London Toy Fair last month. And perennial fan favorite Lego is using AR in its Life of George game and in some of its product packaging.

There are many potential uses for AR. Hewlett-Packard was on the road at this year’s Consumer Electronics Show (CES) and other venues showing off Autonomy’s Aurasma for retail and other applications. Bodymetrics demonstrated an AR fitting room at CES; some realtors are using AR to make house listings more compelling.

With more than 184 million iPhones on the planet, plus all the other iPads and smartphones out there, the addressable audience for AR goodies will only grow as will applications beyond fun and games.

Feature photo courtesy of  Flickr user antjeverena

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Code 42, a Minneapolis, Minn.-based backup and software recovery company received a whopping $ 52.5 million round of capital from Accel and Split Rock Partners. This is the first investment from Accel’s $ 100-million big data fund. The new investment dollars will be used by the company (which is profitable) to diversify and become what it calls an “information management provider.”

Sounds lofty, doesn’t it? It could be. Matthew Dornquast, co-founder and CEO of Code 42, says that Accel had been pursuing the company for two years, but only now was he ready to pull the trigger. With the growth in mobile devices and the data stored on corporate and consumer networks that is moving not only from device to server, but device to device, Dornquast realized that Code 42′s software could become more than just a backup and sharing service, but a way for corporations to understand what data and how data was moving between employees and the devices they use.

Code 42 makes CrashPlan, software that backs up data on devices in real time. It offers a consumer and enterprise versions of the product. CrashPlan launched in 2007 after six years of Code 42 attempting other products and ways to bootstrap the business. For the last three years Code 42 has been profitable, although Dornquast did not disclose revenue.

So what’s the future for CrashPlan and Code 42 with $ 52.5 million burning a hole in its pocket? The first step is to expand globally and add new features. The new features should add up into an interesting whole. Dornquast says the company’s ability to see data on devices in real time and back that data up offers a world of opportunity from making e-discovery easier by knowing what documents reside on whose computers to controlling who can access certain files. For example, in the healthcare industry, which is governed by the Health Insurance Portability and Accountability Act, being able to restrict access to information or follow it across devices is a valuable compliance tool.

Another facet of Code 42′s software that works in its favor, is that it can deliver the stored documents to its own cloud, a private cloud run by the enterprise, other computers or devices or a combination of any of the above. Enterprises tend to request delivery to their own cloud in four out of five of CrashPlan’s initial deployments said Dornquast in an interview.

At this time he said CrashPlan is protecting over 100 petabyte of data mostly from North America. For perspective, one year ago Fusion-io the company helping incorporate SSD drives into servers issued a release touting that it had shipped 15 petabytes of data in 2010, which was, “enough storage-class memory to hold more than 199 years’ worth of continuously played HD video or 15,360 times the entire print contents of the Library of Congress.”

Accel’s Ping Li said, that putting such a large amount of a $ 100-million fund in Code 42  was an exception and that fund’s other investments aren’t likely to be that large. Ling emailed me, “As for the $ 100mm, it comes out of our current venture and growth funds which is well north of $ 1 billion globally. If we find more opportunities that takes us above $ 100mm, we definitely have enough available capital. … Also, I highly doubt we will be doing a ton of big data fund investments of this size. For example, the next big data fund company is a seed deal where we putting in $ 750,000.”

As Code 42 takes on the larger role of helping companies track and manage their flows of information between devices and people, Dornquast will undoubtedly encroach on territory that Box.net, DropBox and others have staked out. It may also end up going against Google Enterprise Search, although that, so far, seems an opportunity that Google has yet to mine.

Dornquast is ready for the challenge, having the benefit of existing enterprise customers and a heritage of making software that enterprises trust and that consumers want to use. I understand that Accel is calling this a big data investment, but i many ways it feels more like a response to the consumerization of the enterprise. Because if people didn’t want to use it, those petabytes of data– and the advantages of having access to those — wouldn’t be there.

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If AT&T-Mo’s failure taught us anything it’s that if the big U.S. operators are going to grow they can’t do it by acquiring each other. Instead they’re going to have to buy up what unused spectrum is left on the market to stockpile bandwidth for their future mobile broadband networks.

While AT&T was distracted trying to buy T-Mobile, Verizon Wireless quietly negotiated deals with the cable providers to buy up their unused SpectrumCo 4G licenses. The Yankee Group has prepared a nifty graphic that details the current spectrum holdings of the big boys in the top 10 markets as well as what Verizon could gain by buying up the cable operators licenses:

The operator with the biggest spectrum chest isn’t Verizon or AT&T, but Clearwire, which has spent several years consolidating 2.5 GHz licenses across the country. It doesn’t have a 150 MHz in every market, but it has those quantities in the largest cities where they’re the most useful. With more spectrum, Clearwire can launch much higher-capacity networks without building more towers.

What’s more, Clearwire’s frequencies are all earmarked for 4G, while most of AT&T and Verizon’s spectrum is in the cellular (850 MHz) and PCS (1900 MHz bands), which are tied up in their CDMA, GSM and HSPA+ networks. It’s the 700 MHz and AWS (1700/2100 MHz) column you should pay close attention to because therein lies both operators’ future 4G growth.

Here Verizon has the clear advantage with an average of 57.2 MHz in the top 10 cities – all of which it can devote to LTE. AT&T has less than 40 MHz in those same markets, which is a good indication why AT&T wanted T-Mobile’s AWS spectrum so desperately. Plus, if Verizon succeeds in buying SpecrtumCo and Cox’s licenses it will add considerably to its lead over AT&T.

Some explanation of the chart is required here. SpectrumCo and Cox spectrum holdings don’t overlap, so combined they own 20 MHz in the top 10 markets, not 20 MHz each. Still, Verizon would be able to increase its 4G reserves to over 75 MHz if the deals go through, something that must make AT&T and any other operator very nervous. AT&T just closed its own deal to buy up Qualcomm’s leftover 700 MHz FLO TV spectrum, but that gain is small compared to the size of Verizon’s potential windfall.

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2011 was a great year for GigaOM Pro, as our startup within a startup continued to grow quickly on all fronts. We’re counting on 2012 to be even better year, as we stay on top of changes in fast moving markets and look to increase the value we offer to subscribers of GigaOM Pro.

One of the areas we’ve seen huge demand for research from both our online and corporate customers is in the area of enterprise IT and cloud computing. From our tablestakes infrastructure, platform and storage coverage, to surging interest in all things big data, to evergreen topics such as enterprise mobility and social enterprise, we can’t produce research fast enough for our customers in this space.

So as 2012 will no doubt bring new opportunities, it will also bring a new face to GigaOM in Jo Maitland, our new Research Director for Enterprise at GigaOM Pro.  Many of you know Jo from her time as as an Executive Editor at TechTarget, where she steered the coverage of all things cloud computing, managing five dedicated cloud sites by the time she came to GigaOM.  In addition to her time at TechTarget, Jo cut her teeth as an industry analyst with Forrester and the 451 Group.

We have big plans in 2012 and expect Jo to be a big part of our success, please help me welcome her to GigaOM Pro.  You can follow her over Twitter and  over at GigaOM Pro, where she’s already finished her first report and will also be our infrastructure curator.

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I just ordered a Christmas decoration with a difference. Yes, it’s a snowman. Yes, it’s ice white with coal-black eyes and buttons. Yes, it’s got a little string so I can hang it from the tree to celebrate the festive season.

But this one uses the power of Twitter.

Frstee is the latest experiment from some friends of mine in London known collectively as the Really Interesting Group. They’ve come up with a way to inject a bit of the web into Christmas by producing an individually-manufactured bauble whose dimensions are determined by online data… in this case, details about your Twitter usage.

So, when you order your very own Frstee, the system takes a look at a Twitter account of your choosing (perhaps yours, perhaps a friend’s, perhaps Lady Gaga). And the more followers you have, the bigger the snowman’s head. Conversely, somebody with a small Twitter following will have an undersized noggin:

In addition, the number of buttons on the snowman’s front correspond to the number of years you’ve been using Twitter.

So you end up with something like this:

It is intended, say the gang with tongue firmly in cheek, to cause “a uniquely Social Media frisson around your festive tree.”

He’s been on sale for a couple of weeks already, but this isn’t Frstee’s first time at the snowdeo. Really Interesting Group has got form on this stuff: a couple of years ago they produced a series of data-based objects (“datadecs”) which included not only a Twitter snowman, but also baubles cut to represent your online listening patterns, travel patterns and photo uploads. This time they’re making the idea available to the public.

If you want a Frstee in time for Christmas you’d better hurry. Manufacturing and delivery take 21 days because each one is 3D printed individually and shipped off to you. And while these one-offs aren’t exactly cheap — mine cost £19.50 ($ 31) — they are a lot of fun.

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Uptake’s CEO Yen Lee likes to kid that he runs “the largest travel search company that no one’s heard of.” It’s not entirely a joke: At nearly five years old, Uptake has steadily built itself up to attract some 4 million unique visitors per month, which Lee says makes it the number three travel search website in terms of traffic behind TripAdvisor and Yahoo Travel. But the Menlo Park, Calif.-based company obviously does not have the same kind of name recognition as its larger competitors — at least not yet.

Making travel tips super social

On Wednesday, Uptake made its first real public push with the debut of a Facebook app called Travel Q&A. Travel Q&A gathers information from your Facebook friends to help you find the best people from your existing friend circle to ask about certain travel destinations and activities.

Uptake app screenshot (click to enlarge)

The way the app works is pretty straightforward: Say I’m going to New Orleans. If I’m logged into Travel Q&A, I can search for New Orleans on the Uptake site, and the app will identify which of my friends are best positioned to give me travel recommendations. I can then choose to ask any or all of those people for their travel recommendations either through a public wall post or a private Facebook message.

According to Uptake, this is no easy feat. The company says Travel Q&A runs on its patent-pending “destination mining” technology that “analyzes both friends’ explicit location data, such as hometowns and check-ins, as well as friends’ less-obvious, implicit location data … in the form of photos, status updates and comments.”

Cutting through TripAdvisor’s clutter

Personally, I think Uptake’s Travel Q&A app could provide a nice alternative to scanning through the mountain of user-generated reviews on sites such as TripAdvisor. When I’m looking at those kinds of sites, I find myself spending lots of time sorting through entries and trying to determine if the people who wrote them are credible or relevant to my tastes. I already know and trust my Facebook friends, so going straight to them for advice makes sense — and Uptake’s targeting makes it so that I don’t end up spamming all my contacts or doing a “lazy web” post on my Facebook wall.

The problem, of course, is that the travel space is already quite crowded. But Uptake has been working on the problem for nearly five years — it took on its first round of funding back in early 2007, and has amassed a total of $ 12 million from VCs — and Lee, a Yahoo veteran who co-founded San Francisco Citysearch back in the mid-1990s, says he is well aware of the unique challenges the sector presents. In fact, that’s why it has been building itself up so quietly until now. He put it this way:

“Making money in travel is the easiest part. The hardest part is we knew that our go to market strategy wasn’t unique; it was about execution.”

There’s no doubt that Uptake is facing stiff competition, but the company seems as well-prepared as anyone to aim for the crown. Here are a couple more Uptake Travel Q&A screenshots (click to enlarge):

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