Arista takes over VeloCloud: Broadcom sell-off?

Arista Networks has announced the acquisition of VeloCloud, a leading provider of SD-WAN solutions, from Broadcom. This confirmation was preceded by initial rumors a month ago. Is this the start of Broadcom selling off parts of the VMware acquisition? The acquisition appears strategically interesting for Arista, as the provider is now increasingly gaining a foothold in the campus switching and WLAN environment after data center switching and therefore still has to bridge the WAN. Arista is also purchasing a ready-made SASE solution and intends to promote it as part of its campus portfolio.

VeloCloud brings an SD-WAN and SASE solution with advanced security and routing capabilities to Arista's portfolio, complementing the existing switching and wireless products in Arista's campus. This integration enables Arista to position itself as a complete provider in the routing/switching environment and to stand up to competitors such as Cisco or the new team of HPE and Juniper. By combining VeloCloud's SD-WAN technology in the WAN between branch offices and larger sites with Arista's new campus stacking and also the proven leaf-and-spine network architecture, Arista can provide a complete solution for enterprises.

Arista plans a seamless transition of VeloCloud services so that customers can be migrated without downtime. According to the FAQ, Arista is already providing support and the same applies to orders. No other changes are planned for existing customers in the short term. Further information can be found at Arista.

Outlook

VMware acquired VeloCloud in 2017 for 450 million US dollars. Broadcom in turn acquired VeloCloud as part of its USD 61 billion takeover of VMware. The question now is what the future holds for Broadcom and VMware. Will there be further divestments? However, the network security solution NSX appears to be too deeply integrated into the VMware ecosystem for a sale.

To date, Arista has courted customers with a uniform EOS operating system. This will initially change in the SD-WAN. This raises whether the VeloCloud functions will flow into EOS in the coming years, or whether there will at least be a management-side integration into Arista's Management Cloud vision. The impact on the stability of the code base will also be relevant, given that Arista advertises a low number of CVEs. On the other hand, the takeover is likely to open up an exciting alternative in the network environment for some customers.

(mack)