Red-Hot Cradlepoint Nabs SDN Startup Pertino

Fast-growing networking vendor Cradlepoint is ending its red-hot year with the acquisition of software-defined networking (SDN) specialist Pertino.

Boise, Idaho-based Cradlepoint will leverage Pertino's cloud technology to enable customers to rapidly deploy software-defined overlay network services to support 4G/LTE mobility, Internet of Things and security-related solutions, according to the company.

"We are in rapid growth mode and there are huge benefits for our partners as we bring in and integrate Pertino," said Ian Pennell, chief marketing officer at Cradlepoint. "They'll use a Pertino-Cradlepoint combination to allow customers to rapidly deploy highly scalable overlay networks. … We see so many cases of where customers want to go this way because it's just so much easier, and our partners don't need too much in-depth knowledge of how to set and configure it, because so much of the complexity is handled by the cloud."

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Financial terms of the deal were not disclosed.

2015 was a breakout year for Cradlepoint, which nabbed $48 million in a Series B funding round that it intends to invest in international expansion and its channel community. The privately held company touts itself as the global leader in software-defined 4G LTE network solutions, selling nearly 100 percent through the channel.

The company was the fastest-growing vendor selling 802.11ac routers through distribution for the third quarter of fiscal year 2015, according to market researcher NPD Group. Cradlepoint nabbed more than 20 percent of the market share for the third quarter, taking share from leader Netgear in the space.

Cradlepoint has quadrupled company revenues over the past three years and is expecting "north of 50 percent" growth year over year for 2015, said Pennell.

"SDN is growing substantially," he said. "Our percentage of revenues that come from services is growing two times faster than hardware growth."

David Schwarz, president and co-founder of Access Wireless Data Solutions, a Tampa, Fla.-based solution provider and Cradlepoint partner, said the company is disrupting the market and creating rich services opportunities for its partner community.

"Their product platform and the product strategy is such that they can actually develop and roll out product now faster than any of the competitors in the marketplace," said Schwarz. "I can wrap services around [products], so instead of just selling a product, we're selling a complete solution."

Schwarz said his company is seeing high double-digit growth in its Cradlepoint business and sees it only growing in the future. He said the acquisition of Pertino is "advantageous" and will push Cradlepoint to continue to evolve its product line around innovative technologies in markets such as SDN and IoT.

"Our customers are increasingly interested in the benefits SDN can bring to their business, especially how it can be utilized in conjunction with 4G LTE services," said Schwarz.

Pennell said the acquisition will allow Cradlepoint to quickly address the emerging opportunity for software-defined enterprise network solutions and services. Cloud, mobile and IoT are driving the need for new enterprise WAN, with 4G LTE rapidly becoming the preferred means to keep everything connected, he said.

The addition of the Pertino technology and team strengthens Cradlepoint's efforts to enable private, wireless virtual networks over the public Internet, with virtualized services that run in the cloud, and CPE to provide the end-to-end visibility, security and control enterprises need, according to Pennell.

"The most exciting thing about Pertino is that it fits right in and just accelerated us on our granular vision of how to bring these capabilities together," said Pennell. "And partners will benefit from the recurring revenue streams that will come from that."