VMware intends to close the VeloCloud acquisition in the fourth quarter of its fiscal year, which ends in early February. Terms of the deal were not disclosed.
The announcement comes little more than a week after Cisco introduced a hybrid cloud partnership with Google in direct competition with VMware Cloud on AWS, which was launched about a year ago and became available in August.
Rene van den Bedem, chief architect at RoundTower Technologies, a Cincinnati, Ohio-based solution provider that works with several vendors, including VMware and Cisco, said VMware Cloud on AWS has the advantage of being first to market and VMware's SD-WAN effort makes "perfect sense."
"Cisco and VMware have to keep up with each other, and this year VMware is really making things happen," van den Bedem said. "There's the partnership with AWS, NSX, vSphere. They definitely have vision and they're the leader in the market. VMware has always been very good at filling the gap, integrating stuff. They're masters at that, and they're back to what they're good at."
The VeloCloud acquisition "makes perfect sense," van den Bedem said. "It is one less thing that you need to go out and shop from a third-party vendor. The one thing [VMware NSX] didn't have was an SD-WAN optimization technology, and this plugs into that very well. For any service provider or solution provider that's using NSX as a building block for the infrastructure and services they deliver to customers, it's one less thing they need to worry about."
Likewise, Mark McKeever, principal at MicroAge, a Tempe, Ariz., solution provider that works with both VMware and Cisco, called the VeloCloud acquisition "brilliant," while arguing that Cisco hasn't clearly articulated a vision for its Google partnership.
"The Google partnership is still not really clear to me," McKeever said. "I haven't heard any articulation around that. I'm not saying they won't fulfill it, but they're saying they’ve got something and we'll find out later what that means."
"It's completely brilliant," McKeever said of VMware's planned VeloCloud acquisition. "Of course they want to make an investment there. They have NSX, and you have to have the performance to go hand-in-hand with that, and that's what SD-WAN is all about. When you see NSX working over SD WAN, they go hand-in-hand and it's brilliant."
"SD-WAN is a really hot offering and it will be a massively exploding segment because few people are using SD WAN today," McKeever said. "People need this stuff and they don't know it yet. When you explain these practice-based solutions to people, the interest level skyrockets. We've done a little bit of business with VeloCloud, and we're really interested in growing that practice. The sky's the limit; there's no question about that."