VMware announced Thursday afternoon that it was buying application delivery controller startup Avi Networks, but it didn't disclose the financial terms.
Once Avi Networks is in hand, VMware said it will be able to deliver the industry’s only complete SDN stack across Layers 2 through 7 that's built for the modern multi-cloud era.
“VMware is on a major multi-cloud push, and the Avi Networks deal adds an important piece to the puzzle," said Scott Raynovich, the founder and chief analyst of Futuriom. "Being able to manage and secure multi-cloud workloads is the future of networking.”
In addition to VMware, Cisco, Juniper Networks and IBM are pursuing multi-cloud platforms, products and services for enterprises. Traditional hardware-defined ADCs, including those that have been reformatted to run as software on virtual machines (VMs), lack the required capabilities to scale, secure, monitor and perform in a highly distributed cloud environment, according to VMware.
Once the deal closes in VMware's fiscal second quarter next year, VMware will offer both built-in load balancing capabilities as part of VMware NSX Data Center as well as standalone ADC.
Some legacy ADC vendors lack analytics and insights capabilities, which makes troubleshooting application problems slower and more complex. The legacy ADC market has been relatively steady over the past few years with market leaders such as 5F Networks and Citrix.
In March, F5 Networks announced it was buying virtual load balancing vendor NGINX for $670 million. Citrix was also rumored to be interested in buying NGINX.
The traditional ADC vendors provision small and large appliances in data centers versus a DevOps, microservices, container-per-application ready software model that NGINX and Avi embrace.
Back in June, Avi raised $60 million in a series D round that included Cisco, which was a first-time investor.
VMware said the deal, which has to go through the customary closing conditions, wasn't expected to have a material impact on its fiscal 2020 operating results.