VeloCloud CEO: Service Provider SD-WAN Adoption Will Drive Channel Revenues In The Enterprise

As carriers sign up for SD-WAN in hopes of adding new value-added services for customers, SD-WAN startup VeloCloud is becoming a magnet in the service provider market, recently scoring technology partnerships with the likes of AT&T, Sprint, NetOne, Vonage and Earthlink.

In an interview with CRN, VeloCloud CEO and co-founder Sanjay Uppal said the service provider wins will ultimately lead to new revenue opportunities in the enterprise for channel partners.

"There's a lot of large enterprises who will trust service providers to get these kind of SD-WAN services," said Uppal. "We need to work with them so we -- with our 100 percent channel model -- can get to the enterprise."

[Related: CloudGenix CEO Blasts Cisco And Riverbed's SD-WAN Solution; Says WAN Optimization Market Is 'Dead']

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Partners and analysts believe 2016 is the breakout year for SD-WAN. By the end of 2019, 30 percent of enterprises will have deployed SD-WAN technology in their branches, up from less than 1 percent in 2015, according to research firm Gartner. Meanwhile, MarketsandMarkets believes the SD-WAN market will reach more than $5.55 billion by 2020 because of the increasing need for mobility services and simplified network architecture.

Vince Bradley, CEO for Malibu, Calif.-based World Telecom Group (WTG), a master agent that partners with AT&T, Verizon and Earthlink, agrees with Uppal, saying enterprises will "absolutely" be attracted to these SD-WAN services.

"It is the most intelligent and efficient network design," said Bradley. "The intelligence in the network allows for the most delay-sensitive traffic to go where it is needed -- the bigger pipes and those with better quality of service, while those that are not delay sensitive [go] to DSL and cable connections at the edge."

Bradley also said SD-WAN is more cost effective for enterprises than MPLS, "as it is only one circuit cost rather than the circuit and layer as with MPLS."

Uppal touted VeloCloud's cloud-delivery offering as the most broadly selected SD-WAN solution in the service provider arena because its solution enables carriers to optimize application performance reliably by delivering networking over the Internet, extend services to the cloud, integrate with their existing core networks, and manage their networks efficiently.

"Our engineers had to make our solution into a system that SPs could install and run, which means there were technology features like multi-tenancy, scalability, and the ability for the SP to customize the system so they can add whatever value-add features for their business," said Uppal.

Uppal said enterprises currently own too much premise-based devices – such as routers and firewalls – that are moving to the cloud. This provides a great opportunity for channel partners since carriers' networks are already in the cloud, he said.

"Their cloud is there network. So what they're doing is, instead of selling more boxes to go on-premise, we're moving this function for them into the cloud and into their cloud. So now they can run that as a service," said Uppal.

Mountain View, Calif.-based VeloCloud is expecting revenues to increase seven times from 2015 to 2016, according to Uppal. "We are well exceeding our initial projected revenue and customer growth numbers," he said.

VeloCloud launched its Partner Program in 2014 and is ahead of other SD-WAN startups in channel initiatives, according to Uppal.

"Right from the get-go we had a channel program, unlike some SD-WAN players who are just announcing they're channel programs after they've already been in business three or four years," said Uppal.