VMware Goes Deeper Into Networking With VeloCloud Acquisition

By Will Townsend - November 2, 2017
VeloCloud corporate logo Today, VMware announced its intent to acquire start-up VeloCloud Networks. Founded in 2012 in Mountain View, CA , VeloCloud, has raised a significant amount of venture capital over the past five years due mostly to the company’s success in the software-defined wide area network (SD-WAN) space. The start-up would bring nearly 1,000 customers to VMware , including service providers, telecommunications giants (Sprint Corporation, AT&T and Deutsche Telekom ), and recognizable large enterprise customers ( Brooks Brothers and NCR, among others). The acquisition is expected to close by the end of VMware ’s fiscal 4Q 2018 and the VeloCloud CEO and executive team are expected to remain post-acquisition.
 VeloCloud delivers an SD-WAN solution in public, private, or hybrid cloud network flavors, for connection to cloud/enterprise applications and branch office/data center appliances—all through software-defined orchestration. VeloCloud SD-WAN is comprised of three core components:
  • A network of service gateways deployed at cloud datacenters globally that provide scalability, redundancy, and on-demand agility
  • Enterprise-class appliances that provide connectivity to facilitate private, public, and hybrid workflows, as well as the ability to host NFV services
  • An orchestrator that provides centralized and automated configuration, and provisioning and monitoring across the branch, the cloud, and the datacenter
On the surface, the acquisition nicely extends VMware ’s expertise from the data center into the branch. The combination should also allow VMware to compete more effectively in networking, against traditional incumbents such as Cisco Systems and the recently reinvigorated Extreme Networks (following their acquisition of Brocade). Could this also be the first domino to fall in a consolidation of SD-WAN solution providers?
According to a VMware executive (on the VeloCloud announcement call with press and analysts), the most interesting “play” is on the service provider front. VeloCloud has a significant footprint with the service provider community, and brings with it a considerable route-to-market for NFV. Time will tell but the marriage of VMware and VeloCloud looks to be a great match.
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Will Townsend manages the networking and security practices for Moor Insights & Strategy focused on carrier infrastructure providers, carrier services, enterprise networking and security. He brings over 30 years of technology industry experience in a variety of product, marketing, channel, business development and sales roles to his advisory position.