Cisco Opens SD-WAN with Viptela Buy

May 03, 2017

By Paula Bernier - Executive Editor, TMC

Cisco (News - Alert) this week revealed its plans to buy privately held SD-WAN company Viptela Inc. for $610 million. The deal is expected to close in the second half of this year.

A few years ago Cisco introduced its Intelligent WAN solution to enhance the application experience in branch offices and across wide area networks, Kiran Ghodgaonkar, who at the time was Cisco’s senior manager for product and solutions marketing  (he’s still with Cisco, but has a different title now), told me during a November 2015 interview.

Then SD-WAN emerged, he said, and that brought software-defined networking technology to the WAN. SD-WAN, he noted, gives customers the ability to centralize and automate policy management. It also provides network operators with the flexibility to scale the network up and down; to ensure the appropriate quality of service for applications and services; and to address business continuity/disaster recovery, security, and more.

IWAN – which is based on Cisco’s APIC-EM, its various routing platforms, its ONE Software, and the security appliances it got via its 2012 Meraki acquisition – was the company’s answer to the SD-WAN craze.

And during our interview Ghodgaonkar talked about how there are three groups of companies offering SD-WAN solutions: traditional router vendors like Cisco, HP, and Juniper, which he said are building on top of hardware platforms with more centralized automation and management tools; traditional point players like Riverbed (News - Alert) and Silver Peak, which are repositioning themselves as SD-WAN players by adding routing functionality to existing solutions; and emerging startups with new solutions that include thinner clients at branch offices that can be deployed on their own or in front of existing routers. The third group, he said, are providing enterprises with a really fast way to get to a hybrid WAN.

Viptela falls into this third group. Its solutions are based on open technologies. It has the business of such major carriers as Singtel and Verizon, as well of use more than 25 of Fortune 500 businesses. And it’s backed by Sequoia Capital (News - Alert).

But, as my conversation with Ghodgaonkar illustrated, the SD-WAN space has become a crowded market. The good news, however, is that it’s a quickly growing one. IDC (News - Alert) estimates that worldwide SD-WAN revenues will exceed $6 billion in 2020, with a compound annual growth rate of more than 90 percent between 2015 and 2020. 

Edited by Maurice Nagle

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