Cisco Systems may be falling behind in the race to the cloud pending VMware’s acquisition of VeloCloud. The traditionally hardware-focused technology giant is now facing direct competition in the networking space from VMware, a leader in cloud infrastructure and virtualization tech, and VeloCloud, a leading SD-WAN startup. VMware recently announced their acquisition of VeloCloud as part of a strategy to enhance the company’s Network Functions Virtualization (NFV) and overall networking solutions.
The exact purchase amount has not been released, nor is the acquisition strategy fully mapped. What is clear about this acquisition is that the transition to a cloud-focused business model is still going strong, in light of other acquisitions such as Mitel/ShoreTel and Cisco/BroadSoft. The changes in the market are hitting fast and strong now in Q4 as businesses are gearing up for 2018.
VMware Plans For The Future
The VMware/VeloCloud acquisition is a strategic move to expand VMware’s software-as-a-service portfolio with VeloCloud’s highly successful hosted SD-WAN solutions. They have stated that a new era of networking is emerging and in order to stay on the forefront of a developing market, networking solution providers must embrace more agile, software-delivered technologies like SD-WAN.
How VeloCloud Delivers
This is where VeloCloud excels by providing the ability to leverage intelligent edge devices and cloud solutions that are managed by software-defined controls. VMware also has tentative plans to integrate VeloCloud solutions with their Network Virtualization and Security Platform (NSX) which will further brand recognition for this product as well as enhance its capabilities.
Cisco, who has also been acquiring SD-WAN companies such as Viptela into their solution portfolio, will need to continue adopting newer, software-delivered technologies in order to keep up. Despite Cisco’s established foothold in the communications space, their renewed competition with VMware proves that today’s market requires an increasingly flexible business model and diverse product portfolio to withstand the latest industry disruptions.