SDN Technology

Cisco Joins $27M Round for SD-WAN Startup VeloCloud

SD-WAN startup VeloCloud plans on Thursday to announce a $27 million Series C round from backers including Cisco Systems. The investment brings total funding to $49 million.

The lead investor is March Capital Partners, with return funding from New Enterprise Associates (NEA) and Venrock Associates , according to Michael Wood VP of marketing for VeloCloud Networks Inc. An additional vendor investor is keeping its involvement secret, Wood tells Light Reading.

VeloCloud's differentiator is "zero-touch" deployment, Wood says. Its software runs on x86-based CPE in branch offices, and connects to gateway servers that VeloCloud runs in the cloud -- that is, VeloCloud runs the servers in data centers including those owned by Equinix Inc. (Nasdaq: EQIX), Amazon Web Services Inc. , Bit Refinery and Internet exchanges.

Founded in 2012, VeloCloud has more than 100 customers -- including Vonage Holdings Corp. (NYSE: VG), NTT Data Corp. , Deutsche Telekom AG (NYSE: DT) and Rockford Construction -- many using the service for unified comms, video and voice. VeloCloud allows its customers to provide QoS even when conditions deteriorate on MPLS or public Internet connections, Wood says. VeloCloud's service can also be used to provide QoS for other applications, including SaaS and regular Internet traffic.

"In the branch office, the only way you could control QoS was if you owned all the links. But using our solution, if you go over the Internet you can control traffic shaping and QoS," Wood says. The technology shapes and throttles traffic to make sure priority traffic gets to the branch office and lower quality traffic gets "squeezed off and throttled," he adds.

One VeloCloud customer found its employees were watching Netflix during the day, which degraded quality for the company's VoIP apps. The company activated a policy on its VeloCloud service, controlled Netflix traffic and eliminated the VoIP problems, Wood says.

VeloCloud's service is multi-tenant, which attracts service provider customers who can use it to guarantee QoS to their enterprise customers, Wood says. And many large enterprises want carrier-grade solutions.

As enterprises turn to public clouds for mission-critical applications, they require the kind of control VeloCloud offers to ensure QoS.

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Other companies besides VeloCloud are also stepping up to solve the QoS problem. Just this week, Cisco Systems Inc. (Nasdaq: CSCO) launched a service to allow enterprises to monitor employees who might be signing up for "shadow" clouds without the consent or even knowledge of IT. (See Cisco Helps Rein In 'Shadow' Clouds.)

Startup Versa Networks ' multi-tenant cloud NFV platform offers SD-WAN support similar to what VeloCloud describes. (See Startup Versa Announces 'Carrier-Grade' Multi-Tenant NFV Platform.)

Another startup, Saisei , uses flow control technology to manage network traffic by the app, or throttling the same bandwidth to each endpoint regardless of what apps those endpoints are running. (See Saisei Boldly Claims to Double Net Capacity and Saisei Debuts 'Net-Neutrality-in-a-Virtual-Box')

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to [email protected]

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