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December 8, 2017
VMware’s acquisition of VeloCloud dominated the attention of the SD-WAN market for the last month, but plenty of its rivals are making major moves.
As numerous vendors and analysts proclaim that software-defined wide area networking has “gone mainstream,” companies are making bold moves to establish themselves as contenders in the hot market. Talari appointed a new CEO and new channel strategy last month and Aryaka hired a new chief revenue primarily because his experience in filing an IPO. Although the experts tend to agree that M&A will likely continue to play a big role in shaping the SD-WAN industry, companies aren’t sitting on their hands and waiting.
In our latest installment of the SD-WAN Roundup, we highlight one of VeloCloud’s largest competitors, Cisco SD-WAN. We’ll also hear from Silver Peak and Aryaka about the prospects of an SD-WAN company going public and learn about the newest offering on the block.
Cisco is probably the most common reference I come across in interviews with SD-WAN companies. Earlier in the year, younger competitors like CloudGenix and Riverbed made a major selling point out of comparing their products to Cisco’s IWAN product, mainly because of IWAN’s use of routers. And talk of routers persisted when Cisco finished acquiring Viptela in the summer, a deal that analyst Matthew Toth called it a good fit between two “router-based systems.” Rival Silver Peak has been running a promotional campaign that takes a not-so-subtle jab at Cisco and infers that routers are a thing of the 1980s.
So are these assessments of Cisco SD-WAN as a router-based system true? And if so, is using routers an effective strategy for SD-WAN? Or is the router-driven approach like Molly Ringwald: beloved during the ’80s and early ’90s but lacking the depth required for any meaningful sense of career longevity?
Ramesh Prabagaran, senior director of product management for Cisco SD-WAN, spoke to Channel Partners about how his company differentiates itself. He explains that SD-WAN is more than a “transport-independent fabric with application-aware capabilities.” According to Prabagaran and Cisco, there should be a fundamental shift to delivering the technology with a cloud focus.
“Our fundamental philosophy is; you need to fundamentally decouple the circuit that connects all the sites together from the servers that are built on top of it. The service that’s being built on top of it needs to have an element of control and management. If that’s delivered out of the cloud, then you have the efficiencies that go along with it, and with that you also get a layer of visibility,” Prabagaran said. “All of those things are kind of table stakes for somebody to consume this technology today.”
As for the router question, Prabagaran acknowledges that it has become a popular polemic against Cisco. But he …… and Cisco believe that routers have a role to play in SD-WAN.
“But at the end of the day, you need to have sophistication in routing. How do I transition a thousand-site customer one site at a time from the old to the new? In order to make that work properly and seamlessly, you need to have an element of routing,” he said.
He has a point in that Cisco’s approach will ease the pain and the fear of transition for customers — especially for large enterprise customers that already have a large array of hardware.
“When I do the jump, I can’t completely transition my network overnight. I need to make the old network talk to the new. That’s really where the sophistication comes in,” he said. “Routing is not just about building routers and placing routers at the customer site; it’s about connectivity. ‘How do I make sure that my site gets the high availability that it requires? How do I make sure that I have the most optimal way of going from one place to another?'”
Another big piece of Cisco’s SD-WAN strategy is security. Prabagaran says the technology opens up several new areas of security conversation with customers, such as encryption, authentication and segmentation requirements.
“You cannot fundamentally decouple an SD-WAN conversation from the security architecture,” he said. “In fact, we actually see the security architecture as being brought into focus and built off the SD-WAN conversation.”
Prabagaran adds that SD-WAN technology has essentially hit the mainstream, as a large range of companies — from large enterprise to mid-market to public sector – have validated it. And this can open a new door of opportunity for partners to grow.
“They can move from maybe some low value stuff to some really high value, software-based, analytics-based constructs very very quickly, and then provide a bridge from there to what Cisco has been pushing with the network and Internet-based networking and so forth,” he said.
Silver Peak shared earlier this week that it has officially surpassed 600 deploying customers of its Unity EdgeConnect SD-WAN offering. At the end of a year that saw its two biggest competitors get bought, Silver Peak’s large customer list shows that it has the resources necessary to grow organically. Frost & Sullivan puts the company at third in market share. CEO David Hughes spoke to Channel Partners about his vision for SD-WAN. He says WAN needs have … … more than a “software-defined” attribute. It needs to be “self-driving” — meaning that it has the automation and logic to achieve its company’s business goals.
“How do you build a network that runs itself? And how do you have a network where you give it very high-level instructions just like you might give a self-driving car? You’re basically saying, ‘I want to go from A to B.’ You’re not telling it exactly how to get there, exactly how to make every turn, exactly how fast to drive; it does all that itself. The same thing with networking and with the WAN; can we have a WAN where you capture the CIO or the business unit leader’s intent for the network by service group and avoid ever having to think about configuring individual devices,” Hughes said.
Hughes echoed Prabagaran’s sentiment that SD-WAN is going mainstream. And for Hughes, that means we can expect at least one IPO filing from an SD-WAN company within the next calendar year. Futuriom suggested that Silver Peak, Aryaka, Cradlepoint and Fat Pipe Networks are all candidates to go public in 2018.
“You’re getting a number of players who are potentially moving to the region where they’re north of $100 million in SD-WAN revenue and doubling or tripling year-over-year,” Hughes said. “If you add those numbers up, then you’re on the path to an IPO.”
Hughes says being private was huge in allowing Silver Peak – which was founded in 2008 – to transition its core business. “One of the classic advantages of being private is that you can afford to make technologically bets or market bets that might be hard to explain to the average investor. It lets you do things like shift the business from being a WAN optimization business to being led by SD-WAN – which is something we’ve done as a company,” he said.
Aryaka hired Mike Hoffman as its chief revenue officer and senior vice president of global sales. That’s significant in itself, but the bigger news here is Hoffman’s credentials. He helped Gigamon file for an IPO in 2013 and comes to Aryaka with the goal of joining the hot SD-WAN market.
“Mike has been building successful, goal-oriented sales teams with a channel focus for more than 30 years. His experience in growing a company from a private startup through a successful IPO will be extremely valuable during this next stage of expansion for Aryaka.” President and CEO Shawn Farshchi said.
Read more about Aryaka’s SD-WAN goals in the interview it did with us for our last SD-WAN Roundup.
The widely regarded market share leader VeloCloud announced a new policy implementation approach for its SD-WAN solution. The idea is to customize the network’s goals and application priorities for different business departments within the same company. That company also…
…announced this week that VeloCloud Edge is available on the AWS Marketplace.
“The increasing integration of VeloCloud SD-WAN with AWS together with the uniquely flexible deployment options further differentiates our solution in the market,” said Steve Woo, vice of Products and Co-Founder of VeloCloud Networks.
IHS Markit posted some interesting new numbers on the SD-WAN market share. Read SDxCentral’s article to see IHS Markit’s graphic for worldwide revenue.
Read more about:Agents
Senior News Editor, Channel Futures
James Anderson is a news editor for Channel Futures. He interned with Informa while working toward his degree in journalism from Arizona State University, then joined the company after graduating. He writes about SD-WAN, telecom and cablecos, technology services distributors and carriers. He has served as a moderator for multiple panels at Channel Partners events.
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