Cisco is acquiring Viptela for $610 million, signaling one of the first shots of necessary consolidation in the crowded SD-WAN vendor segment.
By purchasing privately owned Viptela, Cisco will immediately expand its SD-WAN portfolio with cloud-based software functionality.
After completing all of the customary closing conditions and regulatory review, Cisco expects to close the acquisition in the second half of this year.
Upon completing the acquisition, Viptela’s team will join Cisco's Enterprise Routing team within the Networking and Security Business led by SVP David Goeckeler. Viptela and Cisco engineering teams will be working closely together to enhance Cisco's SD-WAN offering and ensure continued support for its customers.
Interestingly, Viptela’s current CEO, Praveen Akkiraju, is a former Cisco executive. During his 19 years at Cisco, Akkiraju built and led every one of the company’s routing platform businesses. In his final role with the company, he served as the senior vice president and general manager of routing vendor’s Enterprise Networking group, where he rebuilt the strategy and business for the multibillion-dollar ISR and ASR product portfolio.
Cisco has not revealed what Akkiraju’s role will be at Cisco following the acquisition yet.
RELATED: SD-WAN vendor Viptela names Cisco veteran Akkiraju as CEO
Viptela brings to the table for Cisco a set of management, orchestration and overlay technologies to ease service provider and enterprise SD-WAN deployment and management. Viptela’s cloud-first approach also aligns with Cisco's Digital Network Architecture (DNA) transition to software-driven, automated networks that it says are more flexible, responsive and dynamic.
"With Viptela and Cisco, we will be able to deliver a comprehensive portfolio of comprehensive on-premises, hybrid, and cloud-based SD-WAN solutions,” said Scott Harrell, SVP of product management for the Cisco Enterprise Networking Group, in a release.
Besides the management capabilities, Viptela also brings a compelling roster of large distribution partners, including Verizon and Singtel. Verizon, Singtel and others like Dimension Data offer managed SD-WAN services based on Viptela’s SD-WAN gear.
Viptela was one of the first SD-WAN vendors to get the service provider’s attention. The market also attracted a host of other vendors, including fellow startups Silver Peak, Versa and VeloCloud as well as established vendors such as Cisco and RAD Data Communications.
Verizon named Viptela as its SD-WAN partner last year. The solution aimed to expand Verizon's Managed SD-WAN portfolio currently based on Cisco's iWAN technology in the U.S., Europe and the Asia-Pacific region, which it launched in 2015.
While Viptela is its latest acquisition target, it likely won’t be its last, particularly as other vendors in this group have also gained service provider attention for their SD-WAN platforms. Cisco has a reputation for consolidating various segments, and SD-WAN could be a growing target for the company as it looks to play a bigger role in their service provider’s network virtualization plans.