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 Channel Futures

SDN/SD-WAN


Silver Peak, Riverbed Weigh in on Cisco-Viptela Acquisition

  • Written by James Anderson
  • May 2, 2017
Cisco’s plan to buy the software-defined wide area networking company Viptela has caught the attention of the industry.

James Anderson**Editor’s Note: Please click here for a recap of the biggest channel-impacting mergers in February and March.**

Cisco’s plan to buy software-defined wide area networking company Viptela has caught the attention of the industry.

The networking giant announced Monday that it will buy the privately owned Viptela for $610 million in a move that it says will bolster its SD-WAN portfolio.

Scott Harrell, senior vice president of product management for the Cisco Enterprise Networking Group, says customers are demanding the “cloud-focused” technology Viptela offers.

Cisco's Scott Harrell“With Viptela and Cisco, we will be able to deliver a comprehensive portfolio of comprehensive on-premises, hybrid, and cloud-based SD-WAN solutions,” he said.

Cisco has said it will keep Viptela’s product offerings while integrating its capabilities into Cisco’s Intelligent WAN (IWAN) and Meraki. The company said Viptela’s cloud-based approach fits well with the goal of transitioning the Cisco Digital Network Architecture to a software-centric model. Viptela is a San Jose-headquartered company that was founded in 2012.

Multiple SD-WAN providers have publicly commented on the deal, including Riverbed, which has openly criticized Cisco in the past. Riverbed CEO Jerry Kennelly says this acquisition signals the end of “pure-play” SD-WAN vendors and the second wave of disruption in the space.

“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,” Kennelly said.

Kennelly compared the two companies at the recent Riverbed Partner Summit, where he said Cisco’s IWAN solution is router-centric and inferior to Riverbed’s SteelConnect.

“Let them poison the well on their side,” he told partners.

John Vincenzo, Silver Peak senior vice president, says that more M&A is on the radar for vendors that can’t tackle all of the wide-area networking requirements. He says customers demand a WAN edge that is software-defined, “application-driven” and has WAN optimization capability in a single device.

“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,” Vicenzo said. “The bottom line — it’s hard to address the lack of a cohesive technology platform by continually adding incremental piece parts.”

Mike Champion, founder and CEO of Xcelocloud, says the acquisition and its price are not surprising.

“This move preserves Cisco’s continuation of hardware and packet-based strategies going forward,” he told Channel Partners. “The question becomes whether or not this is what the market and customers really want.”

He says M&A among SD-WAN vendors – including major carriers – for the next two to three years is likely. He also says CIOs would be wise to pursue SD-WAN solutions with carrier-agnostic WAN architecture, because certain mergers could decrease customers’ choices.

“We will see SD-WAN companies take offers like Viptela that provide solid returns for investors — and some of these will make sense to end customers and companies, and others will not,” he said. “In a sizzling hot market, we will see acquisitions of all sizes in order to get in the game, much like what Cisco is doing.”

Tags: Agents Cloud Mergers and Acquisitions SDN/SD-WAN

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