Leading our Industry into a Software-Defined Future with Strategic M&A

By Shekar Ayyar

At VMware, we’ve been a pioneer and leading innovator in “software defined” for nearly two decades. To get there, we have championed our own internal innovation, and augmented those efforts with acquired technologies. Previously, I outlined our three key tenets of our M&A strategy – platform acquisitions, industry acceleration acquisitions, and technology tuck-ins. This strategy helps us enhance our current product and service portfolio, keeps us at the forefront of industry leadership.

Today I’m excited to share with you news about our latest platform acquisition with our intent to acquire VeloCloud Networks, the industry-leading cloud-delivered SD-WAN technology for enterprises and service providers. With VeloCloud, we will build on the success of the industry’s leading network virtualization platform – VMware NSX. What NSX does for data center networking, VeloCloud does to the wide-area network and edge environments – all in software.

Customers choose VMware NSX because it delivers network and security services closest to the application. Upon closing, VMware and VeloCloud will bring the same properties to the wide-area network (WAN) with a comprehensive SD-WAN solution that provides full visibility, metrics, control and automation of all endpoints, resulting in better performance and availability for enterprise and cloud applications.

It’s A Software-Defined World

Networking in software is emerging as the de facto underpinning of an everything-to-everything connected architecture among data centers, branches, and the cloud. It exposes capabilities to enable access and interoperability across virtual machines and containers, IoT edge devices, domains, geographies, and organizational boundaries. And with the impending explosion of cloud services, customers will require new multi-cloud networking, security, and management capabilities that provide visibility, automation, and control from the data center to the cloud to the edge.

For Telcos and communications service providers (CSPs), the race to software-defined is a business imperative. They face high customer expectations coupled with margin erosion, increased competition, lack of service differentiation, and pressure driven by a new generation of applications available on many different form factors that are enabling new digital business models. They must look for ways to use their network assets to deploy new services in an agile, cost-effective and secure manner. Existing infrastructure is proving to be rigid and expensive. With 5G on the horizon, they have a chance to reassert themselves via distributed Telco clouds supported by network functions virtualization (NFV).

Networking from Data Center To Edge

At the heart of VMware’s strategy for networking is the belief in delivering pervasive connectivity with embedded security that connects users to applications wherever they may be. VMware’s software-based approach is delivering the networking and security platform that enables customers to connect, secure and operate an end to end architecture to deliver services to the application wherever it may land. This acquisition will further enable VMware to lead the industry transition to a software-defined future and to help customers bring their businesses into the digital era with networking that is ubiquitous, open, programmable and secure by default.

VeloCloud SD-WAN technology enables enterprises to securely support application growth, network agility, and simplified branch and end-point implementations while delivering high-performance, reliable access to cloud services, private data centers and SaaS-based enterprise applications. Wearing my other hat as GM of our Telco/NFV business, it gives me great pleasure to note that with VeloCloud’s cloud-delivered SD-WAN, service providers can increase revenue and service innovation by delivering elastic transport, performance for cloud applications and enterprise branch and edge services. (read our Telco blog here).

To Continuous Innovation!

As I’ve mentioned many times over, VMware’s M&A strategy focuses on acquiring leaders in industry adjacencies. Like other platform acquisitions we’ve made, such as Nicira, AirWatch and Wavefront, we believe VeloCloud is an industry leader. We will be acquiring the leader in SD-WAN with a world-class roster of enterprise and service provider customers – 1,000+ to date.

SD-WAN is a natural extension of our networking strategy, and a perfect complement to NSX in the data center. We expect VeloCloud + NSX will be a powerful combination that stitches together the fabric that can deliver global consistency, manageability and security from the core to the edge.  As edge computing explodes, we believe this is a big opportunity.

We’ve developed the industry’s most successful software-only networking solution with VMware NSX, and we are excited about what we will be able to achieve with VeloCloud beyond datacenter to the enterprise edge and beyond.


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