VMware will expand its networking portfolio by acquiring software-defined wide-area networking (SD-WAN) vendor VeloCloud. The deal, which is expected to close in VMware’s fiscal fourth quarter 2018, will enable VMware to expand its network virtualization platform, VMware NSX, from the data center to the network edge.
VeloCloud has more than 1,000 customers using its SD-WAN, including many service providers. AT&T, Sprint, Deutsche Telekom, Telstra, Macquarie Telecom, and Windstream use VeloCloud’s software to sell SD-WAN services to their customers. VeloCloud’s enterprise customers include Brooks Brothers, which has deployed VeloCloud in 278 of its stores.
In a blog post, Gabriele Di Piazza, VMware’s VP of telco NFV, said the goal of this deal is to build deeper partnerships with the service providers. He notes that VeloCloud’s SD-WAN can be deployed as a virtual network function (VNF) on universal CPE, which helps speed deployment and reduce operating costs.
The two companies already have a history of working together. VeloCloud is part of the VMware Ready for NFV certification program, which validates interoperability and operational readiness between third-party-developed VNFs and VMware’s vCloud NFV platform.
And in August, VMware became a member of VeloCloud’s SD-WAN Security Technology Partner Program. The technologies of the group’s members are interoperable, making it easier for VeloCloud’s SD-WAN customers to deploy these security products.
“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,” said VMware CEO Pat Gelsinger in a statement.
VMware also said it plans to offer SD-WAN to its enterprise customers so they can have more agile networks and have more reliable branch access to their cloud services, private data centers, and other applications.
Competing with Cisco
VMware’s purchase of VeloCloud is also seen as a way for the company to better compete against networking giant Cisco. In August, Cisco completed its $610 million acquisition of SD-WAN firm Viptela. The company is now part of Cisco’s enterprise routing group within Cisco’s Networking and Security Business Unit that is headed by SVP David Goeckeler.
Cisco said at the time that it planned to dedicate engineering resources to SD-WAN and would combine Viptela’s cloud-first network management, orchestration, and overlay technologies with its own routing platforms, services, and SD-WAN capabilities.