VMware executives discussing the virtualization giant's planned acquisition of SD-WAN player VeloCloud took a clear shot at the hardware-centric approach to networking embodied by Cisco for a generation.
"The network that got us here is not the network that is going to push us forward," Rajiv Ramaswami, VMware COO products and cloud services, said during a conference call with analysts and journalists Thursday. The call was held after VMware announced that it had reached an agreement to acquire VeloCloud in a move that some solution providers said could put traditional networking giant Cisco in "panic mode."
When asked to address competition with Cisco directly, Ramaswami emphasized the often complex relationship between the two companies. "There is a competitive dynamic there," he said. "Customers make the choice what's right for them. We win some, and they win some."
Still, Ramaswami said enterprises are moving rapidly away from traditional networking. "Like Cisco, we also have a significant enterprise footprint, enterprise buyers and many of the enterprise buyers we talk to want to go to the world of software-defined. They see their world much more application-centric than network centric," he said.
"There are going to be situations where we could end up where we compete directly with Cisco for that offering, and we're going to win that based on the merits of the solution," Ramaswami said. "We're quite comfortable with what we have and the capability to offer a solution."
SD-WAN helps simplify connections between large enterprise networks and branch offices using commodity switches and software instead of expensive, proprietary enterprise routers. VMware's acquisition of VeloCloud deepens the hybrid-cloud competition between the virtualization giant and Cisco. Cisco moved into the SD-WAN market with its $610 million purchase of Viptela in May, and last week introduced a solution that competes directly with VMware Cloud on AWS.
A high-level executive at a top Cisco partner said there's no mistaking that VMware's VeloCloud buy takes square aim at Cisco.
"If I'm VMware, I would do the same thing," said the executive, who asked not to be named. "I'd want to sell across the whole portfolio rather than just pieces. It's another swim lane that is now overlapping. The rest of the VMware ecosystem really isn't a big a deal. I can't think of another major OEM partner of VMware that Viptela would overlap. They're going at each other."