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Cisco to Acquire SD-WAN Provider Viptela

Cisco yesterday announced its intent to acquire Viptela, a privately held software-defined WAN business, for $610 million in cash and assumed equity awards, with the aim of extending its SD-WAN portfolio and increasing the functionality it delivers via the cloud.

Cisco will be combining Viptela's cloud-first network management, orchestration, and overlay technologies with its routing platforms, services, and SD-WAN capabilities, the company said.

With SD-WAN an increasingly hot topic in the enterprise, the acquisition is well-timed, said Zeus Kerravala, UC analyst, SD-WAN SME, and close Cisco watcher, in an email exchange about the acquisition. "Deployments are still limited but I believe we are at a tipping point where customer interest will soon turn into implementations," he explained.

Customers today are demanding a focus on simplicity and ease of deployment along with a rich set of capabilities and scale, which is what Viptela provides, said Scott Harrell, SVP of product management for the Cisco Enterprise Networking Group, in a prepared statement. "With Viptela and Cisco, we will be able to deliver a comprehensive portfolio of ... on-premises, hybrid, and cloud-based SD-WAN solutions."

Cisco has been providing SD-WAN services for several years, as Rob Salvagno, VP of Corporate Business Development at Cisco, wrote in a Cisco Blogs post about the acquisition. The Cisco Intelligent WAN (IWAN) solution is an on-premises SD-WAN offering for companies that need advanced routing features, and Cisco Meraki adds in cloud-based unified threat management functionality. With the Viptela acquisition, Cisco is aiming to provide more choices for enterprise branch offices and WAN deployments so it can better meet varying size and scale requirements, Salvagno wrote. At the same time, he added, the additional SD-WAN capabilities will help the company accelerate its transition to a recurring, software-based business model.

"Viptela's cloud-managed, open platform and most importantly, easy to deploy SD-WAN should complement Cisco's on-premises IWAN solution," Kerravala agreed. Regarding possibly redundant cloud-based SD-WAN, he added, Viptela's solution is more mature than Cisco's Meraki. "Over time it would make sense for Cisco to integrate Viptela, IWAN, and Meraki, and give customers a range of choices from a single solution rather than having to choose from multiple products."

As Kerravala explored during an SD-WAN session at Enterprise Connect Orlando and in a No Jitter post, the enterprise opportunity with SD-WAN includes cost savings and so much more. In fact, he noted six benefits: the ability to handle brownouts and protect against network failures, make configuration changes in minutes rather than months, dynamically orchestrate network paths, support zero-touch provisioning, connect directly to the cloud, and simplify operations. As No Jitter editor Beth Schultz pointed out in another recent article about SD-WAN, a seventh benefit of the technology could be the ability to tighten security.

With all these perceived benefits, Cisco's move to strengthen its SD-WAN position makes sense. As Cisco has noted, more customers are looking to SD-WAN solutions for managing and orchestrating WAN deployments in order to boost access to cloud solutions and corporate networks, especially as network management continues to grow in complexity due to trends like enterprise mobility and Internet of Things.

The acquisition, which includes the Viptela team, is expected to close in the second half of 2017.

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