Cisco Systems Inc. recently announced that it plans to acquire Viptela for $610 million in cash and assumed equity awards. The California based startup, Viptela, makes SD-Wan (software-defined wide area network) solution which enables companies to connect the networks of distributed offices to their data centers.
“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,” said Scott Harrell, senior vice president of product management for the Cisco Enterprise Networking Group. The acquisition of Viptela is a sensible move by Cisco as it can combine Viptela’s cloud-first network management, orchestration, and overlay technologies with its own routing platforms, services, and SD-WAN capabilities which will offer customers more choice in their enterprise branch offices and WAN deployments. The acquisition is expected to close in the second half of the year pending regulatory views.
Viptela provides a modern software-defined solution in the cloud, which is in demand in the market. Cisco, which was a pure network hardware business earlier, can now shift to a services & revenue based company. Instead of buying data center hardware, the company can use cloud services to gain more customers. “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,” wrote Rob Salvagno, Cisco’s VP of corporate business development, in a blog post.