Cisco and Microsoft made a fairly significant announcement this week around Windows 8, Hyper-V, and Nexus 1000V. Why did I use the word "significant" here? 1. Nexus 1000V can bridge Microsoft and VMware at the network. Hyper-V is gaining momentum with Windows-centric mid-market but ESG Research also indicates that 71% of enterprise organizations have adopted multiple virtualization technologies. Many of these shops will have a combination of VMware and MS Hyper-V as well as vCenter and System Center. Nexus 1000V can bridge these two environments, offering common provisioning, configuration, and role-based administration at the virtual switching tier, while also integrating these heterogeneous server virtualization environments with the physical network. This will solve a lot of network operations headaches and help CIOs accelerate their server virtualization and cloud projects.2. While Microsoft is making progress on the server virtualization front, Hyper-V does not have the networking sophistication of either VMware (ESX, ESXi, vSphere) or Citrix XenServer. VMware's recent VXLAN announcement at VMworld demonstrated the company's focus and vision to link virtual networking with application workloads and thus remove legacy physical networking boundaries and operational overhead. At the same time, Citrix is betting on Open vSwitch for a lot of the same sophisticated networking functionality. With regard to networking, Hyper-V lagged behind. Rather than push its own networking agenda, Microsoft is hitching its wagon to Cisco and Nexus -- a combination that already has a well established leadership position in data center networking. 3. Yes, Cisco continues to bet a lot of dough on VMware but it can enhance its position by eschewing any technology dogma and acting as a networking Switzerland. In spite of VMware's success, Cisco can now play in shops that choose Hyper-V alone or implement in the growing base of mixed VMware\/Windows infrastructure. Cisco will also be able to sell UCS -- along with Hyper-V aware fabric interconnects -- into a global base of Windows shops. Finally, Cisco can adapt vBlocks and FlexPods to Microsoft environments. In other words, Cisco's total addressable market just grew -- big time. This deal won't be exclusive. Just as Cisco works with VMware and Citrix, Microsoft will open up virtual switching functionality to the likes of Arista Networks, Brocade, HP, and Juniper. Heck, Microsoft may also embrace Open vSwitch and OpenFlow as well. Regardless of what it does moving forward however, the combination of Microsoft (Windows 8\/Hyper-V) and Cisco (NexusOS, Nexus 1000V) is a smart move by both companies. With one announcement, Microsoft made up tremendous virtual networking ground on its competitors while Cisco elbowed its way to the top of the networking hill in Windows and Hyper-V shops.