Cisco is set to buy Viptela, a privately owned software-defined wide area network (SD-WAN) company.
Cisco is paying over $600 million to acquire the startup, with SD-WAN offering companies an easier way to connect their networks and data centres from different branches. SD-WAN is becoming increasingly important as it allows enterprises to create a new network via software, eliminating the need for expensive proprietary hardware.
Viptela was started in 2012 by former Cisco Engineers, Amir Khan and Khalid Raza, and has raised over $108 million, including $75 million in 2016.
Scott Harrell, senior vice president of product management for the Cisco Enterprise Networking Group, said: “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. These principles are what today’s customers demand.”
“With Viptela and Cisco, we will be able to deliver a comprehensive portfolio of comprehensive on-premises, hybrid, and cloud-based SD-WAN solutions.”
Viptela reportedly makes it easier for companies to connect to their networks by offering a cloud first solution that simplifies the complicated process of establishing a SD-WAN connection for businesses.
Cisco currently already provides cloud and on premises SD-WAN solutions but this latest acquisition will allow Cisco to expand its portfolio and increase its cloud functionality.
In a blog post, Harrell said: “With Viptela, Cisco can offer customers more choice in their enterprise branch offices and WAN deployments, with a compelling SD-WAN solution that is easy to deploy and simple to manage.”
“Together, Cisco and Viptela will be able to deliver next generation SD-WAN solutions to best serve all size and scale of customer needs, while accelerating Cisco’s transition to a recurring, software-based business model.”
In December 2016 Gartner said: “While WAN architectures and technologies tend to evolve at a very slow pace — perhaps a new generation every 10 to 15 years — the disruptions caused by the transformation to digital business models are driving adoption of SD-WAN at a pace that is unheard of in wide-area networking.”
Companies like Cisco have previously dealt with WAN connections in the past but this growing trend of SD-WAN is seeing several vendors move towards cloud based solutions.
In April, Riverbed also announced that they would be acquiring Xirrus, another SD-WAN company.
Cisco released its financial results in February and reported that its subscriptions and recurring software had experienced 51% year-on-year growth, which is around 25% of its $11.6 billion quarterly revenue.
Cisco currently 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.