Published: Fri, May 05, 2017
Economy | By Melissa Porter

Cisco to Acquire Cloud-Based SD-WAN Specialist Viptela

Cisco to Acquire Cloud-Based SD-WAN Specialist Viptela

Cisco on Monday said it plans to acquire Viptela, a developer of software-defined, wide area networking (SD-WAN) technology, for $610 million in cash and assumed equity awards.

Viptela's technology will add to the Cisco cloud SD-WAN portfolio by providing a single platform solution combining SD-WAN, cloud, Network-as-a-Service and applications delivered by the cloud and scalable to client requirements. Acquiring Viptela helps Cisco address the threat posed by SD-WAN to its high margin ISR routing business and more generally strengthens Cisco's position in the broader enterprise campus market (switching, routing, WLAN).

At first glance, one might look at this acquisition and wonder why Cisco needs Viptela when it already has two existing SD-WAN solutions-Intelligent WAN (iWAN) and Meraki SD-WAN.

The acquisition, which includes the Viptela team, is expected to close in the second half of 2017. Last year, the company bought Jasper Technologies, a cloud-based Internet of Things platform, for $1.4 billion.

Cisco has been on a buying spree since 2015 making 19 acquisitions.

Cisco says Viptela's SD-WAN solution simplifies management, increases agility and reduces costs of interconnecting dispersed enterprise networks.

While Cisco offers both an on-prem and cloud SD-WAN product, Rob Salvagno, Cisco's VP of corporate business development, wrote in a blog post that this purchase gives them a more modern alternative to what they are offering in-house while also offering the lure of subscription revenue.

The acquisition of Viptela also fits Cisco's push to recurring revenue.

"Viptela's technology is cloud-first, with a focus on simplicity and ease of deployment while simultaneously providing a rich set of capabilities and scale", said Scott Harrell, senior vice president of product management for the Cisco enterprise networking group.

Interestingly, Viptela's current CEO, Praveen Akkiraju, is a former Cisco executive. It was founded by former Cisco engineers in 2012, and has raised almost $110 million in investment.

The companies indicated Viptela technology products will survive under the Cisco umbrella. Viptela and Cisco engineering teams will be working closely together to enhance Cisco's SD-WAN offering and ensure continued support.

Cisco now has $70 billion in cash, and this latest acquisition comes after the company purchased AppDynamics earlier this year for $3.7 billion, and Jasper technologies last year for $1.4 billion. Expect to see more service providers offer SD-WAN as a managed service as well as resellers, systems integrators and IT services companies who are looking to expand their service offerings by giving enterprises more choice.

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