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October 15, 2018
Less than two months after taking over as CEO of Aryaka, CEO Matt Carter sees the company's primary challenge as differentiating itself from a crowded field of SD-WAN providers.
What makes Aryaka different? Why should an enterprise or communications provider do business with them rather than an SD-WAN competitor?
Carter's answer: Aryaka doesn't just provide software and hardware. It runs its own network on leased fiber, and can provide the complete package of connectivity, including SD-WAN, MPLS and the last mile, nearly anywhere in the world.
"We are a managed service provider who provides SD-WAN capabilities. For a company that needs to have network services anywhere around the world, Aryaka can provide that service, head to toe," Carter tells Light Reading. "We procure the local circuit, the last mile, and also provide you with the over-the-top software layer that allows you to have secure network access to your critical applications."
That means, as a managed service provider, Aryaka both partners and competes with telcos. The company has partnerships in China and Europe, but it also sells direct to enterprises. (See Aryaka Tackles New China SD-WAN Regulations With Partner China Mobile.)
Figure 1: Aryaka's Carter is smart... very smart.
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While Cisco and VMware provide a DIY approach, selling components that a customer, telco or MSP have to integrate, Aryaka provides the complete connectivity solution, Carter says.
Aryaka owns and manages the middle mile of the network, which enhances security, with built-in WAN optimization, including TCP optimization, application processes and SaaS acceleration, says Andy Leong, Aryaka senior director of product marketing. With 30 worldwide PoPs, Aryaka can connect 95% of the world's business population within about 30 msec of latency. "We've architected this purpose-built software-defined private network, where we've essentially written a software stack on top of the infrastructure to give us this level of application performance and optimization," Leong said.
Additionally, Aryaka provides multicloud connectivity, with any-to-any connections for Amazon Web Services, Microsoft Azure and Google, with Oracle to come.
All of which ties in with long-term targets and developments at the company, but some things have changed under Carter's leadership.
In January, Aryaka CMO Gary Sevounts told us the company was working toward a 2019 IPO. Now, that's no longer the goal -- the company is simply focused on continued growth and momentum, Carter says. Business is strong, he says, and needs to get stronger. "We'll take a look at our options down the road and see what makes the best sense for the company," Carter says. Aryaka needs to be in a position to have "attractive options," which could include IPO, or strategic partnership, or continued independence, Carter said. (See Aryaka CMO Sets Sights on IPO in 2019.)
But why the change in direction regarding the IPO? "Nothing has changed in terms of the business," Leong said in an email. "Gary conveyed the direction of Shawn Farschi, the previous CEO, who pursued a singular exit path for the company. Matt's direction, as expressed on our call, is to build a robust business which will result in exit optionality for Aryaka."
Aryaka's goal is to grow its business commensurate with the overall growth of the SD-WAN market. Key to that will be attracting additional Fortune 500 companies, Carter says. Current Fortune 500 customers include Samsung, Emirates Airlines and Cigna: Building on that base will help validate Aryaka.
Revenue for the SD-WAN market overall was $221 million in the second quarter of 2018, doubling year-over-year and up 25% in sequential quarters, according to a report from IHS Markit. VMware had 18% market share, Aryaka was in second place with 15% and Cisco entered the top three with 12%, the report says.
Carter declined to share Aryaka's current annual revenue run rate, though it's clear that as a growing company with 15% of a $221 million market in the second quarter, Aryaka is looking likely to hit or top annual revenues of $150 million this year. What we do know, though, is that the company is nine years old, employs about 300 employees globally, and has raised $120 million of funding in four rounds.
Next page: Competition heating up
Competition heating up
Heavy Reading analyst Sterling Perrin agreed that Aryaka is a strong company. "Aryaka has a lot of momentum right now, with a marquee enterprise customer list, a top market share position, and a growing list of industry accolades -- including being named Light Reading's 2018 Company of the Year [Private]," he said. (See Leading Lights 2018: The Winners and SD-WAN Revenue Reached $162M in Q1 2018.)
Perrin adds, "The private network has allowed Aryaka to differentiate from the pack by focusing on performance, rather than best-effort Internet."
Aryaka's managed services model puts it in competition with operators such as AT&T, Verizon and "any other operator big or small getting into managed SD-WAN services," Perrin said.
Because Aryaka is a pure-play SD-WAN provider, it has "absolute focus on a single market," Perrin said. Also, it has no MPLS business to worry about, allowing it to compete aggressively against MPLS. "Many service providers are conflicted on MPLS," Perrin said.
But Perrin noted that its "biggest challenge, at this point, is to continue this momentum as the operator market in particular gets more competitive. It is very early still for SD-WAN managed services, so competition is going to ratchet up. They've got an early foot in the door, and they'll need to make the most of it."
Carter has a track record that suggests he might be able to achieve such a goal. Before joining Aryaka, he was president and CEO of Inteliquent, Inc., a listed unified communications company, where he says he resolved long-standing tension between the board and management team, and nearly doubled revenue from $220 million to $400 million in less than two years and oversaw the acquisition of the company by private equity firm GTCR.
Prior to that he was president of enterprise and IoT for Sprint, among other positions. (See More Executive Shake-Ups at Sprint .)
Carter has a blueblood educational pedigree, with a Masters of Business Administration from Harvard Business School.
"Harvard was a great experience. But there has been an equal number of failed Harvard Business School people as successful ones," he says. In the end, success is what counts.
Carter has a blueblood accent too; hailing from Dorchester, a neighborhood of Boston. He speaks like a member of the New England Yankee elite -- a long-lost Kennedy brother or Thurston Howell III.
Carter is also a relative rarity -- an African-American tech CEO.
"I think the board didn't select me for that reason," Carter says. "They said, 'Here's a guy, he's been a public company CEO, he ran global business, has a track record of demonstrated leadership and can help scale the company," Carter says.
In particular, Carter has been successful turning around troubled companies -- or, as he sees the challenge with Aryaka, taking successful companies to the next level.
He adds that he believes his race and position gives him a responsibility to succeed, to "open the door for others who look like me."
Carter continues, "If I do my part, it makes it easier for others -- women as well -- to be considered and accepted as options for this role," Carter says. His success will open doors for others who don't look like the conventional image of business leadership.
— Mitch Wagner Executive Editor, Light Reading
Executive Editor, Light Reading
San Diego-based Mitch Wagner is many things. As well as being "our guy" on the West Coast (of the US, not Scotland, or anywhere else with indifferent meteorological conditions), he's a husband (to his wife), dissatisfied Democrat, American (so he could be President some day), nonobservant Jew, and science fiction fan. Not necessarily in that order.
He's also one half of a special duo, along with Minnie, who is the co-habitor of the West Coast Bureau and Light Reading's primary chewer of sticks, though she is not the only one on the team who regularly munches on bark.
Wagner, whose previous positions include Editor-in-Chief at Internet Evolution and Executive Editor at InformationWeek, will be responsible for tracking and reporting on developments in Silicon Valley and other US West Coast hotspots of communications technology innovation.
Beats: Software-defined networking (SDN), network functions virtualization (NFV), IP networking, and colored foods (such as 'green rice').
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