Silver Peak Plans Channel Investment, Aims For Top Of The SD-WAN Market With $90M Round From TCV
With a new investor more-than doubling its funding, SD-WAN power
player Silver Peak is hastening its ascent and intensifying its
battle with competitors like Cisco and VMware, said Founder and CEO
TCV, an equity firm with investments in marquee tech names from Airbnb to LinkedIn, Netflix and Zillow, has provided Silver Peak with a $90 million cash infusion. Before the new investment, Santa Clara, Calif.-based Silver Peak had raised about $80 million since its founding in 2004.
"We're investing broadly, and we're investing in sales and the channel," Hughes said, saying the company plans to hire personnel into its global sales organization, including people who work with the channel, in customer support and R&D. The effort, Hughes said, comes as SD-WAN moves quickly from popularity among early adopters to much broader acceptance in the market.
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"The question isn't going to be have you deployed SD-WAN, it's going to be why haven't you, and our channel partners are beginning to see the same thing," Hughes said. "They're realizing there's a really big opportunity as the whole infrastructure around the WAN gets turned out over the next couple of years. Channel partners are always looking for a good place to invest their resources where there's going to be a return, and not just a small amount of sales, but where it can become a big part of their business. A number of them are finding that SD-WAN, and SD-WAN from Silver Peak, is that option for them."
Silver Peak trails VMware's VeloCloud and Aryaka in the global SD-WAN market, according to recently published Q1 research from IHS, but Hughes argues Silver Peak has advantages over its larger competitors, especially VMware and Cisco, which acquired SD-WAN pioneer Viptela last year.
"Those are big companies, and one of the advantages that comes with being acquired by a big company is you have more resources, but sometimes you become just a sliver of a really big pie and you have to fight for those resources, or the air time," he said. "It's not necessarily an advantage."
Conversely, Hughes said, Silver Peak has the advantage of focus, and now a much deeper well of funding to draw from. "We've got the capital to grow, and we're focused because we only do one thing," Hughes said. "When people want to place a bet when making a technology decision, they can place their bet with a company that's going to remain focused."
SD-WAN market revenue hit $162 million in the first quarter, according to IHS, more-than doubling its size in the same period a year prior. IHS considers SD-WAN a "maturing market," and expects it to hit $861 million in revenue globally this year.
Adoption of SD-WAN is increasing even among "compliance sensitive" businesses in health care and finance, IHS said.
Jon Groves, CEO of Alexander Open Systems, an Overland Park, Kan., solution provider that works with Silver Peak, as well as Cisco in the SD-WAN market, said AOS has bank customers that use the Silver Peak solution.
Groves noted that Silver Peak was early to market, and its solution performs well, and said the company is likely to gain more attention from solution providers as it begins to put its newest investment to work.
"It'll be interesting to learn more about how they plan to deploy $90 million in capital," Groves said. "We'll probably learn a little more about how they see the market and their position from their capital dispersion plan."