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VMware Banks on Data Center Agility With Avi Networks Buy

Jeff Baumgartner
6/13/2019

As it aims to extend public cloud-like agility to the data center, VMware has largely focused on developing storage, compute and networking capabilities in-house, but opted to take the buy route for two other key elements of that plan -- load balancing and the Application Delivery Controller (ADC).

That buy route led VMware to its proposed acquisition of privately-held Avi Networks, a Santa Clara, Calif.-based company founded in 2012 that has made some progress penetrating the Fortune 500 market and supplanting legacy, purpose-built hardware.

VMware did not reveal financial terms (it said the deal won't have a material impact on its fiscal 2020 operating results), but expects to close the deal by the end of the company's fiscal Q2, which ends Aug. 2, 2019.

VMware had some "limited capabilities" in load balancing and in the ADC arena, but not in a way that was leading the industry, Tom Gillis, SVP and GM of networking and security at VMware, said on a press call Thursday about the deal.

He said VMware and Avi Networks share a similar architecture and philosophy-- building a central, software-based control plane that can manage both public and private clouds and push the evolution of today's data centers toward virtualization, self-service automation and hyper-cloud scale.

In addition to aligning on vision, both companies also have several joint customers. "We would see each other quite a bit," Amit Pandey, Avi Networks' CEO, said.

Examples of Avi Networks customers include Deutsche Bank, Adobe, Swisslos, Zoll Data and Telegraph Media Group. Pandey said the merger with VMware will enable his company and its products to scale rapidly to a point that, he estimates, would take "tens of years to achieve" without VMware's help.

He said the acquisition should have little impact on Avi Networks's existing customers even as VMware pushes ahead with a plan to tightly integrate Avi's capabilities with VMware's NSX Data Center. VMWare also plans to sell a standalone ADC following the acquisition.

"It should not cause much disruption" to Avi Networks's customers, Pandey said.

In addition to VMware, Avi Networks has already built out support for other cloud providers and technologies, including AWS, Azure, OpenStack and GCP.

Last year, Avi Networks, which counts F5 and Citrix among its competitors, announced that Cisco Systems participated in a $60 million Series D round that extended Avi's total funding to about $115 million.

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— Jeff Baumgartner, Senior Editor, Light Reading

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