VMware buys SDN startup VeloCloud

VMware is aiming to boost its SDN portfolio through VeloCloud's technology, intellectual property, and customer base.

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VMware said Thursday that it plans to acquire SD-WAN startup VeloCloud Networks. Financial terms of the deal were not disclosed, but the Mountain View, Calif.-based startup has raised $84 million in four previous funding rounds.

SD-WAN technology is often used to connect branch offices to corporate networks by dynamically routing network traffic over a combination of private and public access types.

VeloCloud is one of the more prominent players trying to disrupt the SD-WAN market, which historically has been led by networking vendors with hardware-based solutions such as Cisco.

With this purchase, VMware is aiming to boost its SDN portfolio -- and better compete with Cisco -- through VeloCloud's technology, intellectual property, and customer base, which includes AT&T, Sprint and Windstream.

"In the digital era, a new networking approach is required to solve the hyper distribution of applications and data, as we move from a model of data centers to one of centers of data at the edge," said VMware CEO Pat Gelsinger. "With the addition of VeloCloud's industry-leading SD-WAN technology, we will be able to extend the VMware NSX approach of automated, secure, and infrastructure-independent networking to the WAN."

VMware had been developing technologies around software-defined networking since its 2012 acquisition of Nicira, which formed the basis of what would become the company's NSX product introduced in August 2013. More recently, VMware acquired SDN startup PLUMgrid to further strengthen its SDN and container strategy.

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