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Cisco Invests in SD-WAN Provider VeloCloud

In a crowded market, Cisco’s imprimatur could help the partner-centric provider stand out.

Lorna Garey

January 15, 2016

2 Min Read
Cisco Invests in SD-WAN Provider VeloCloud

VeloCloud announced this week $27 million in new Series C financing, bringing its total to $49 million. This latest round includes funding from Cisco Investments and is good news for VeloCloud’s partners, says Michael Wood, the company’s VP of marketing.

78accb4df59c48d8bb03a211d3e314df.jpg“VeloCloud relies on dozens of channel partners worldwide to drive a majority of our rapidly expanding business,” Wood told Channel Partners. “This recent investment round enables VeloCloud to accelerate new product development and customer rollouts and ramp up channel sales and marketing in expanded theaters to meet growing global demand.”

VeloCloud takes a cloud-based overlay approach to software-defined WAN, enabling IT or partners to connect offices, data centers and cloud services using a mix of private lines, broadband Internet and LTE links. The driver for SD-WAN is flexibility — sites may be added much more quickly and flexibly versus nailing up static tunnels. Partners using VeloCloud’s SD-WAN may select public, private or hybrid cloud versions of the software. The company also offers appliances for branch offices and data centers.

Jeff Reed, VP and GM of Cisco’s enterprise infrastructure and solutions group, said Cisco is committed to open networking, and interoperability with VeloCloud’s solution will provide an attractive option for Cisco Intelligent WAN customers looking to transition to SD-WANs.

Mike Fratto, a principal analyst on Current Analysis’ business technology and software team covering the enterprise networking and data-center technology markets, expects SD-WANs overall to grow in popularity this year as contracts for private lines expire and IPsec VPN and other WAN technology products are replaced.

Expect jockeying for position.

“Competition among SD-WAN vendors will be fierce,” says Fratto, and he sees service providers, which don’t want to be marginalized to mere pipes, entering the fray with offerings of their own. Fratto says Cisco will also gain from this deal.

“Cisco is using cloud services as a route to market for a growing set of companies that prefer to lease service and offload the details of product deployment and management, which fits neatly into VeloCloud’s product and service offering,” he says. “VeloCloud has also integrated its SD-WAN with a number of clouds providing intelligent forwarding-based policies. VeloCloud has already demonstrated its upcoming Virtual Edge on Cisco’s ISR branch router, making it a good fit for both companies.”

Current Cisco partners interested in SD-WAN may want to take a look at VeloCloud.

“Cisco’s investment in VeloCloud is a validation of our cloud-centric approach to software defined WAN,” says Wood. “Cisco and VeloCloud will continue to drive interoperability for SD-WAN and enhancements for application and cloud-services performance, which will enable channel partners of both companies to leverage the best of both solutions.”

Follow executive editor @LornaGarey on Twitter.

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