Cisco puts its money where the WAN is

Invests in SD-WAN start-up VeloCloud's Series C

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Cisco has invested in VeloCloud, a software-defined WAN (SD-WAN) start-up with a cloud offering for configuring and optimizing branch office networks. Cisco contributed to VeloCloud’s $27 million Series C round, led by March Capital Partners.

Cisco is one of two strategic investors. The second was not identified by VeloCloud.

SD-WAN is hot. There are several start-ups in the space, including Glue Networks, CloudGenix, Viptela, Talari and Versa. They, and Cisco, have sights set on Cisco’s installed base of branch routers, an opportunity Glue CEO Jeff Gray says is about $12 billion.

Glue is on Cisco’s price list.

Citing Gartner data, VeloCloud says 30% of enterprises will use SD-WAN products in all their branches by the end of 2019, up from less than 1% today.

VeloCloud’s WAN is designed to allow branch offices to go directly to cloud applications without backhauling through a corporate data center. That branch can also use a variety of transport connections, including MPLS, broadband and LTE provisioned through a thin device that steers packets to achieve the optimal performance. Network World blogger Linda Musthaler has a detailed description of it here.

VeloCloud can also be sold to large enterprises as a private WAN, rather than a NID to the cloud. As a cloud offering, VeloCloud is priced as a per-branch/per-month subscription, which is consistent with the procurement model Cisco is adopting.

The Series C funding will be used to expand business operations, accelerate new product development and deployment, and ramp up sales and marketing. The round brings VelCloud’s total funding to $49 million.

In addition to Cisco, the company’s partner ecosystem includes BroadSoft, Equinix, HP, IIx Console, Intel, VMware, Websense and Zscaler.

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