Nicira wants to reinvent routing by Richard Nieva @FortuneMagazine May 1, 2012, 9:28 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons Nicira founder Martin Casado with some gear he hopes to improve FORTUNE — Silicon Valley is full of tight-lipped executives who fear divulging their companies’ technological secrets. Then there’s Martin Casado, co-founder of networking startup Nicira, who won’t even disclose where he used to work. Casado has good reason for his discretion. After graduating with a computer science degree from Northern Arizona University in 2000, Casado, now 35, took a job with a government intelligence agency (he really can’t say which one). He wasn’t a spy, but after the 9/11 terrorist attacks, he had a mission-critical job: making sure computer networks were smart and flexible enough to withstand any calamity, including a hostile act. In the process he discovered that the government’s data networks were hopelessly outmoded and in many cases couldn’t share important information among agencies. “It was almost comical how boneheaded networking was,” Casado recalls. That insight helped inspire Casado to start Nicira — the name means “vigilant” in Sanskrit — which aims to make it easier for computers around the world to communicate. The company, co-founded in 2007 with prominent Stanford network-security professor Nick McKeown and Scott Shenker, a professor at the University of California at Berkeley, makes computer networks more intelligent and less reliant on routers and switches, putting more of the onus on software that automatically carries out important functions so gear can be simpler. It is a variation on the successful virtualization software that VMware VMW has developed to enable one server to take the place of many. More: The 12 greatest entrepreneurs of our time So far the “network virtualization” concept is so novel that research firm IDC doesn’t even track its sales. But Casado, a native of Cartagena, Spain, has managed to attract strong backing. (McKeown, who was also Casado’s adviser on his doctoral research, calls him “one of the most creative people I’ve ever met.” Casado earned his Ph.D. in computer science in 2007.) Nicira has received some $50 million in funding from tech heavyweights such as Andreessen Horowitz and NEA. And orders are starting to roll in from tech companies that are looking to reduce their spending on networking gear, including AT&T T , eBay EBAY , and Japan’s NTT NTT . Web-hosting company Rackspace has included Nicira’s technology in the newest version of its flagship software offering, and sees a long-term relationship. “We’re absolutely planning for our future data centers to have a big component of Nicira in them,” says Lew Moorman, president of Rackspace. But disrupting two decades of network infrastructure won’t be easy. And if Nicira’s software catches on, traditional gearmakers Cisco CSCO and Juniper JNPR could make bets on their own virtualization software. (Cisco, an investor in VMware, certainly understands the concept.) So what’s Nicira’s next move? More alliances like the Rackspace deal? Selling to a gearmaker? Not surprisingly, Casado’s not saying. This story is from the April 30, 2012 issue of Fortune.