VMware’s VeloCloud acquisition: an argument for SD-WAN services?

The recent news around VMware’s acquisition of SD-WAN provider VeloCloud is puzzling from a lot of angles but particularly in what it says about SD-WAN services.

Let’s make a deal

VeloCloud is a leader, and some would say the leader, in the SD-WAN market. The company has been in the space since its founding in 2012 and has raised $84 million in private funding, according to CrunchBase. It claims around 1,000 enterprise customers (1,000).

The VeloCloud acquisition will help VMware compete with Cisco, who acquired SD-WAN provider Viptela for $610 million in May. VeloCloud isn’t VMware’s first virtual networking acquisition. Back in 2012, the company acquired Nicira, which became the basis for its NSX network virtualization offering. Integrating the two technologies creates an interesting end-to-end solution. VeloCloud’s approach of coupling appliances with aspects of a cloud service, will play well with VMware’s premise-oriented strategy.

But it’s VeloCloud service provider focus that’s particularly significant. The company has forged partnerships with 50 service providers to date. VeloCloud also delivers its SD-WAN appliances as a virtual network function (VNF) on universal CPE, a common infrastructure for service providers.

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