https://www.techtarget.com/searchnetworking/news/366627055/Arista-buys-VeloCloud-from-Broadcom
Arista Networks acquired VeloCloud from Broadcom on Tuesday, a move that adds software-defined wide-area networks to its portfolio and advances its networking story.
VeloCloud enables Arista to provide a more complete offering to customers as it strives to remain competitive in a mature market that continues to see convergence between security and networking, according to Jim Frey, an analyst at Enterprise Strategy Group, now part of Omdia.
"It was an opportunity for Arista to fill a gap in their offerings versus their key competitors," he said. "They didn't really have a true SD-WAN-type solution."
Shamus McGillicuddy, an analyst at Enterprise Management Associates, agreed that Arista's purchase of VeloCloud is a move to expand its offerings toward becoming an end-to-end provider of networking products. But he also said its focus on SD-WAN is "a bit behind the market."
Vendors including HPE, Cisco and Extreme Networks already provide customers with a deeper integration between security and networking by providing zero-trust and secure access service edge (SASE) capabilities; security vendors, including Zscaler and Palo Alto Networks, also have portfolios that combine the two technology areas, McGillicuddy said. But Arista isn't quite there yet.
"They don't have a cloud-based security story that would be the basis of a SASE solution," he said. "My guess is that they're going to partner with someone in that realm or maybe make an acquisition or two, but they're not talking about that right now."
Still, Frey said, the purchase of VeloCloud is a step in the right direction for Arista, enabling it to tell a more complete story to customers and to add features it will need if it's to become a more comprehensive provider.
"Arista couldn't answer that entire need without something like VeloCloud," he said.
In its press release, Arista stressed the influence of AI on the networking market, language that wasn't connected to the acquisition itself. Analysts said the deal isn't a direct AI play but indicates preparation to support AI workloads, especially at the edge.
"Having SD-WAN that can do intelligent traffic optimization and performance optimization across wide area network is really important for being successful with these AI deployments," Frey said.
VeloCloud includes VeloRAIN (Robust AI Networking), which incorporates AI and machine learning into the VeloCloud architecture for routing optimization and other functions, according to Cindy Whelan, practice leader in the teleco B2B strategies and solutions group at Omdia. She added that the technology "fits with Arista's broader efforts to incorporate AI into their operations and solutions."
The deal also benefits Broadcom, which would have needed to continue investing in VeloCloud if it wanted it to remain competitive, McGillicuddy said.
VMware purchased VeloCloud in 2017 to bring SD-WAN into its NSX network virtualization portfolio for uses cases such as edge computing. In 2023, Broadcom acquired VMware -- and VeloCloud with it -- in a $61 billion deal. The VeloCloud divestment is strategic and likely indicates that VMware Cloud Foundation and private cloud infrastructure are more of a priority for Broadcom than networking, according to McGillicuddy.
"VeloCloud was part of an incomplete vision for offering a portfolio of network software solutions with NSX," McGillicuddy said. "NSX is now sort of buried within VCF. It's clear Broadcom doesn't want to have a set of networking solutions from VMware."
Nicole Laskowski is the editorial director for Informa TechTarget's enterprise IT news team. She drives coverage for news and trends around AI, enterprise applications and IT infrastructure.
02 Jul 2025