VMware Buys Its Way Into SD-WAN with VeloCloud Networks Acquisition

VMware makes a play to be a market leader in the fast growing SD-WAN space.

By Sean Michael Kerner | Posted Nov 2, 2017
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VMware announced on Nov.2 that it is acquiring privately held SD-WAN vendor VeloCloud. Financial terms of the deal have not been publicly disclosed.

VeloCloud was founded in 2012 and had raised a total of $84 million in venture funding, including a $35 VMware VeloCloudmillion Series D that was announced in March 2017.

Among VeloCloud's investors is Cisco Systems, which participated in VeloCloud's $27 million Series C in January 2016. Cisco has since made another SD-WAN investment, acquiring startup Viptela for $610 million in May 2017.

For VMware, the acquisition of VeloCloud will help to expand its networking aspirations, which today are driven by the NSX virtual networking solution.

"At the heart of VMware's networking strategy is the belief in delivering pervasive connectivity with embedded security that connects users to applications wherever they may be,"VMware CEO Pat Gelsinger stated. "With the addition of VeloCloud's industry-leading SD-WAN technology, we will be able to extend the VMware NSX approach of automated, secure and infrastructure-independent networking to the WAN."

VMware built NSX on top of technology the company gained through the acquisition of Nicira for $1.2 billion in July 2012.

The core technology that VeloCloud has built is an approach to Software Defined WAN (SD-WAN) that is cloud delivered.

"We came up with a new architecture for going after the WAN for enterprises, and we call it the cloud-delivered SD-WAN," Sanjay Uppal, CEO and co-founder of VeloCloud, explained to Enterprise Networking Planet in a 2015 interview. "We're adopting a software-defined architecture and moving services into the cloud."

SD-WAN is one of the hottest areas in networking today, with revenue forecast to grow significantly in the coming years. IDC has projected that the SD-WAN market will grow to $8.05 billion in revenue by 2021.

Sean Michael Kerner is a senior editor at EnterpriseNetworkingPlanet and InternetNews.com. Follow him on Twitter @TechJournalist.

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