Dive Brief:

• Cisco announced plans to acquire Viptela, a software-defined wide area network (SD-WAN) company, for $610 million in cash and assumed equity awards, according to an announcement. 

• Viptela’s software-defined system for enterprises allows customers to more easily manage network resources across hybrid cloud environments and on-prem networks. Cisco representatives said acquiring Viptela will allow them to deliver next-generation SD-WAN solutions more quickly.

• Viptela will become part of Cisco’s Enterprise Routing team within the Networking and Security Group led by Senior Vice President and General Manager David Goeckeler.

Dive Insight:

Managing the corporate network is more challenging today than it used to be given the rise of cloud and IoT applications. SD-WAN is viewed by many as a way for companies to manage it all more effectively.

The acquisition of Viptela could give Cisco a big boost in the SD-WAN market, which is expected to see significant growth over the next several years as companies grapple with their swelling networks.

Cisco is all about evolving its product offerings right now as revenue for the company’s switching and routing systems has steadily weakened in recent years. As part of that effort, Cisco is increasingly trying to change how organizations approach networking.

The company's acquisition comes just after reports surfaced that Cisco may soon sell its operating system software for networking devices without requiring the purchase of its hardware. The move would allow customers to use Cisco operating system software in networking devices made by other companies the first time. With more flexibility, the enterprise giant may be able to increase customer loyalty.