Cisco purchased a networking startup, Viptela. Here's why it's a big deal.
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Why Cisco’s purchase of Viptela is a big deal

Cisco has undergone a number of evolutions in its history, and the various acquisitions made within the last few years mark more changes coming to the organization. Cisco has looked to buy players in rising markets to improve its capabilities and zero in on areas that are still advancing. Recently, Cisco announced the purchase of Viptela, a networking startup, and it promises to be a big deal for the future.

What Viptela brings to the table

Cisco struck a $610 million deal to acquire Viptela and it is expected to close in the second half of this year. Viptela provides a cloud-based software-defined wide area network, which will help Cisco branch out its SD-WAN portfolio, NewsFactor stated. Currently, Cisco has Intelligent WAN and Meraki SD-WAN, but these solutions have to be installed with specified devices. Because Viptela’s solution is cloud-first, it ensures a set of capabilities, ease of deployment, scalability and simplicity that leverages existing hardware.

Cisco purchases viptela

Viptela’s SD-WAN offering provides more flexibility for Cisco customers.

Partnering these capabilities with Cisco will help develop and deliver a portfolio of on-premises, hybrid and cloud-based SD-WAN solutions, providing customers the flexibility they require. Viptela not only helps reduce costs of network management, it also simplifies how organizations handle dispersed networks and respond to issues. Network World stated that it’s likely that Cisco will one day bring all of the management tools together to offer a single platform for any flavor of SD-WAN they want to use.

“Acquisitions are helping to provide Cisco with a more modern networking solution within the cloud.”

Cisco has long been known as a networking giant, but its core switching and routing business is declining. Fortune noted that many organizations are looking for cloud-based resources and data center consolidation. As a result, Cisco is investing heavily in software, as seen with purchases of AppDynamics and OpenDNS, as well as SD-WAN capabilities. These acquisitions are helping to provide Cisco with a more modern networking solution within the cloud to keep up with the trajectory of the market and customer needs.

“Together, Cisco and Viptela will be able to deliver next generation SD-WAN solutions to best serve all size and scale of customer needs, while accelerating Cisco’s transition to a recurring, software-based business model,” Rob Salvagno wrote on the Cisco blog.

On top of the offering changes, Cisco is also starting to operate in a more subscription-based business model. In Cisco’s push to recurring revenue, software-based pricing will help establish pay-per-use models. This will be especially important for provisioning cloud and Internet of Things applications and resources as needed.

Cisco is an undisputed giant within the networking world, but as more organizations consolidate data center hardware, the equipment game is quickly starting to shift. The acquisitions that Cisco has made are well-planned to modernize its offerings and support client needs for years to come. Purchasing Viptela offers a chance for Cisco to enable more flexibility in customer choice and get ahead of potential competitors. If you want to take advantage of Cisco products within your business, contact a capable value-added reseller like Pinnacle Business Systems today.