May 01, 2017 Cisco’s Viptela Acquisition Ups the Ante for SD-WAN Vendors (and Users)
Cisco’s recently announced decision to acquire SD-WAN provider Viptela for $610 million in cash and equity represents both a major validation of the SD-WAN technology space, and a thrown gauntlet to all other SD-WAN providers. Although Cisco has been heavily promoting its own iWAN SD-WAN technology, users have found iWAN to be cumbersome to manage (to the point where VARs and system integrators prefer not to offer it as a managed service, because the complexity and overhead trashes their margins).
By acquiring Viptela, Cisco tacitly acknowledges this weakness in its own offering while doubling down on the value of SD-WAN technology. Viptela’s Secure Extensible Network (SEN) technology is designed for large, complex networks (the company has deployed it to implementations with 3000+ nodes). Vitptela touts its advantages in these scenarios as ease of management, along with embedded security (the nodes will not function if disconnected from the central policy controller). And Cisco cites this same ease of management in its press release announcing the acquisition: “Viptela provides a compelling SD-WAN solution that simplifies management, increases agility and reduces costs of interconnecting dispersed enterprise networks. Its network management, orchestration and overlay technologies make it easy to deploy and manage SD-WAN.” Viptela also has a 100% channel marketing model, delivering its solutions through partners such as Verizon.
For Viptela competitors, including Citrix Systems, CloudGenix, EdgeWater Networks, Elfiq Networks, Mushroom Networks, Riverbed Technology, Saisei, Silver Peak Systems, Talari Networks, and Versa Networks, the landscape just shifted dramatically. One of their competitors now has the muscle and momentum of the strongest networking player behind it. Even for larger companies (like Citrix and Riverbed), that poses a renewed threat.
As for IT and networking professionals, the move marks the mainstreaming of SD-WAN technology. Given Cisco’s doubling-down on the market, moving to SD-WAN is no longer a matter of “if” but of “when”. Highly successful companies are more than twice as likely to deploy SD-WAN as those with less mature networking organizations, according to the Nemertes Cloud and Data Center Maturity Model. Deploying SD-WAN doesn’t mean ditching networking technologies such as MPLS entirely; 78% of organizations say they plan to continue with MPLS and will use SD-WAN as a complementary technology. But IT professionals that haven’t moved to SD-WAN technology are behind the curve; and those using iWAN will likely want to reconsider their selection, given Cisco’s move.