VeloCloud claims 1,000 enterprise customers, but VMware might be just as happy to latch onto the SD-WAN startup's 50 service-provider partners.
"It's basically pouring gas on what we started, from an SP perspective," said Peder Ulander, vice president of marketing for VMware's networking and security business unit. He was talking to media and analyts during a conference call yesterday, after VMware announced that it's acquiring VeloCloud for an undisclosed sum. (See VMware Acquiring SD-WAN Startup VeloCloud Networks.)
"The addition of VeloCloud and their deep relationships with the SP community is a huge route-to-market accelerator," giving VMware a foot in the door to talk to more carriers about VMware's NFV offerings, Ulander said.
In the bigger picture, the VeloCloud acquisition would bring VMware deeper into networking, a market it entered with its NSX network virtualization. "It makes us much more of a mainstream network provider," said Rajiv Ramaswami, VMware's COO of products and cloud services, during the call.
But that's probably a "side effect" and not the motivation for the deal, writes analyst Mike Fratto, of GlobalData, in an email to Light Reading.
VMware has another reason to want SD-WAN: It fills the gap connecting remote offices and branch offices (ROBO) to data centers and the cloud. VMware offers NSX for network virtualization inside the data center, and it's working on extending NSX into the public cloud. And, of course, the company provides virtualized environments for the enterprise.
"The WAN has been a gap for VMware, and with their ROBO [remote office and branch office] strategy they really needed a better solution than VxLAN [a virtual networking protocol] between sites," Fratto says.
VMware would also like to be the vendor that connects an enterprise to multiple clouds, including private clouds and multiple public clouds. The tricky part is that the cloud providers have their quirks. They don't all implement routing protocols in the same way, for example, and VMware has struggled with this as it tries to extend NSX into public clouds, Ramaswami said. (See VMware Launches Amazon Cloud Support.)
"I absolutely think SD-WAN will have an important role to play in simplifying that," Ramaswami said. Part of the answer: VeloCloud has deployed gateways into cloud providers' points-of-presence, creating on-ramps into various clouds.
One awkward point to all this is the VMware Ready for NFV program, where four SD-WAN vendors other than VeloCloud are certified -- meaning their VNFs are tested to work with VMware's NFV Infrastructure (NFVi). (See VMware Debuts New NFV Platform, Services.)
"If VMware can pull a nice and seamless integration with VeloCloud and other VMware software, that will be good for its customers but its certified technology partners are left in the cold," Fratto notes.
VMware is disclosing neither the price of the acquisition nor the size of the VeloCloud team. When the acquisition closes, that team would stay together as a business unit, led by VeloCloud CEO Sanjay Uppal, reporting into VMware's networking business.
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— Craig Matsumoto, Editor-in-Chief, Light Reading