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Cisco Announces Its Intent to Acquire Viptela to Expand SD-WAN Portfolio

Cisco announced its intent to acquire Viptela Inc., a privately held software-defined wide area network (SD-WAN) company based in San Jose.  The acquisition of Viptela would expand Cisco's SD-WAN portfolio with increased functionality and simplicity delivered through the cloud.

With the acquisition, Cisco will be able to accelerate the path to developing next generation SD-WAN solutions, by combining Viptela's cloud first network management, orchestration and overlay technologies with industry-leading routing platforms, services, and SD-WAN capabilities from Cisco.  Cisco said it is committed to Viptela's product offering and architecture as well as existing Cisco Intelligent WAN (IWAN) and Meraki SD-WAN solutions.  The acquisition of Viptela also supports Cisco's strategic transition toward software-centric solutions that deliver predictable, recurring revenue.

"Viptela's technology is cloud-first, with a focus on simplicity and ease of deployment while simultaneously providing a rich set of capabilities and scale. These principles are what today's customers demand," said Scott Harrell, senior vice president of product management for the Cisco Enterprise Networking Group. "With Viptela and Cisco, we will be able to deliver a comprehensive portfolio of comprehensive on-premises, hybrid, and cloud-based SD-WAN solutions."

Managing the network is becoming more complex as applications move to the cloud, employees become more mobile and billions of Internet of Things (IoT) devices are added to the network. For businesses, this means how branch offices are connected must evolve.  Customers are turning to SD-WAN solutions to help manage and orchestrate their WAN deployments, to cost effectively improve access to both the cloud and their corporate network.

Analyst firms like IDC are predicting that SD-WAN will be a $6B market by 2020.  And Cisco competitor Riverbed says this industry is shaping up to becoming a two-horse race.

"We will look back at this announcement and recognize it as the moment when the relevance or notion of "pure-play" SD-WAN officially came to an end," said Jerry Kennelly, CEO and Chairman, Riverbed.  "And we believe it will also be recognized as the point at which a broader vision for the future of networking emerged, representing a second wave of innovation and disruption."

Kennelly continued, "Businesses across all verticals are experiencing the need to digitally transform.  But in order to be successful, they need a new approach to networking... not just another router refresh.  Riverbed's vision for the future of networking is based on three tenets, one of which enables a distributed fabric that connects it all - Users, Branches, Data Centers and The Cloud - and is managed and orchestrated together as one network with cloud-grade agility, simplicity & power." 

According to John Vincenzo, SVP of Silver Peak, the Cisco acquisition of Viptela serves as a clear indication that pure-play SD-WAN vendors that can't address the broader performance and security requirements of the WAN edge will be challenged to build stand-alone businesses, and are likely to be consolidated. 

"At Silver Peak, we believe our customers are entitled to a complete and fully integrated SD-WAN solution and should not settle for offerings that consist of disparate architectures and components that were never engineered to work together-the future should not be an extension of a legacy router-centric WAN architecture past," said Vincenzo. 

Adding, "Cisco customers, on the other hand, are facing an expanded catalog of compromises as the ISR, various flavors of iWAN, Meraki and now Viptela are thrown into the marketecture blender again.  The bottom line - it's hard to address the lack of a cohesive technology platform by continually adding incremental piece parts."

Cisco will acquire Viptela for $610 million in cash and assumed equity awards.  The acquisition is expected to close in the second half of calendar 2017, after having completed all of the customary closing conditions and regulatory review.

Cisco said the Viptela team will join the Enterprise Routing team within the Networking and Security Business led by senior vice president David Goeckeler.  After the acquisition closes, Viptela and Cisco engineering teams will be working closely together to enhance Cisco's SD-WAN offering and ensure continued support for its customers.

Published Tuesday, May 02, 2017 10:14 AM by David Marshall
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