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 Channel Futures

SDN/SD-WAN


SDN

SD-WAN Roundup: Aryaka Chimes In on VeloCloud Acquisition

  • Written by James Anderson
  • November 22, 2017
But VeloCloud begs to differ.

Everyone in the software-defined wide area networking (SD-WAN) market seems to have a strong opinion on VMware’s acquisition of VeloCloud.

The latest report by IHS Markit declared that the SD-WAN industry is now a “two-horse race” between VMware and Cisco after their respective acquisitions of VeloCloud and Viptela. Frost & Sullivan says VeloCloud has the largest market share with 29.5 percent, while Cisco-Viptela is at 14.4 percent, followed by Silver Peak at 12.7 percent and Citrix at 10.1 percent.

Aryaka's Gary Sevounts

Aryaka’s Gary Sevounts

But rival provider Aryaka Networks projects a dreary outlook for VeloCloud’s future.

“If history is the judge, what’s going to happen is these companies will de-focus. The razor edge focus that VeloCloud and Viptela had is going to go away because it’s going to become just one of the companies that VMware has,” said Gary Sevounts, Aryaka’s chief marketing officer.

Sevounts tells Channel Partners that VMware sees VeloCloud as an opportunity to continue its virtualization strategy. Sevounts says VMware began by virtualizing servers an claimed dominance in that market. But now Microsoft, open source virtualization and container-based virtualization are challenging VMware’s market share.

“They’re looking for areas to expand and one of the natural areas in their ‘virtualize-everyting’ strategy is virtualizing the edge, virtualizing the branch office. They had some presence but not really in that area,” Sevounts said. “Their marriage with VeloCloud looks very natural. That will help them establish some headway in virtualizing the branch, virutalizing the edge of the enterprise. From that perspective, it’s a very good, strategic move.”

But Sevounts points out three reasons why the acquisition is not as simple as Cisco’s purchase of Viptela. He says that while Cisco and Viptela were both hardware companies, VMware and VeloCloud come from different backgrounds.

“The other one is that VMware is neither hardware company nor SaaS company, and VeloCloud is a hardware company, and to a degree a cloud [company] too. It will be interesting to see the whole integration,” he said.

Sevounts says that many potential customers are already Microsoft shops and will prove challenging for VMware to virtualize. He also says that VeloCloud will help virtualize the edge but not the entire WAN.

“They have to rely on telcos, which don’t have the technology either. They just provide part of the technology. They don’t have the full gamut, and it just solves part of the problem. Strategically, directionally, it sounds really interesting, but there’s some execution pitfalls and strategically some headwinds coming up,” he said.

Silver Peak said earlier this month that it was excited to see another pure-play vendor join a larger company, but Sevounts says he has a neutral perspective as far as the acquisition affects Aryaka. He says his company differs from companies like Velocloud, Viptela and Silver Peak that need the Internet in order to get cloud connectivity and tend to serve only regional businesses. Aryaka, according to Sevounts, can scale better due to its position as an SD-WAN-as-a-service provider.

Sevounts made several predictions for SD-WAN in 2018:

(continued on next page)

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