Arista Buys VeloCloud from Broadcom for $1B

Arista buys VeloCloud, the SD-WAN platform previously held under Broadcom’s VMware portfolio, marking a new chapter for the pioneering company. Although the exact acquisition sum remains undisclosed, reports suggest the deal could be valued at around $1 billion. Arista buys VeloCloud will offer greater stability for VeloCloud customers who have seen several ownership changes over the past few years.

Arista Buys VeloCloud: Background

VeloCloud

VeloCloud, originally founded in 2012, was acquired by VMware in 2017, which was itself purchased by Dell through its acquisition of EMC. VMware, along with VeloCloud, was spun off in 2021 and subsequently acquired by Broadcom in 2023. However, Broadcom’s decision to divest VeloCloud, now being absorbed by Arista Networks, is seen as a shift towards a more stable future for the SD-WAN platform.

Arista Networks

Arista Networks, primarily recognized for its expertise in datacenter and campus networking, offers a strong portfolio of cloud and networking solutions, including the popular 7000 Series datacenter switches and enterprise Wi-Fi, all under the Extensible Operating System (EOS). The addition of VeloCloud will enhance Arista’s capabilities, particularly in serving customers whose operations are increasingly distributed across multiple geographies. VeloCloud will complement Arista’s existing CloudEOS routing stack and WAN routers, offering expanded options for global WAN services that interconnect data centers and campus offices.

Arista Buys VeloCloud: Challenges

Despite the positive outlook for the acquisition, the key challenge will be integrating VeloCloud’s legacy SD-WAN technology with newer security-focused innovations such as Secure Access Service Edge (SASE). Arista buys VeloCloud to completely transform the technology.

Arista Networks CEO, Jayshree Ullal, highlighted in a blog post that artificial intelligence is reshaping the way WANs operate. The introduction of AI agents, which independently access data to solve problems and enhance productivity, calls for the modernization of WAN architectures. This shift in traffic flow patterns, especially with the rise of AI and agentic AI, has placed new demands on SD-WAN solutions.

Sanjay Uppal, Vice President and General Manager of the new VeloCloud Division at Arista, emphasized that the next evolution of SD-WAN is to secure and optimize AI traffic across distributed enterprise networks. This includes managing traffic from endpoints to branches, campuses, and data centers, both public and private. VeloCloud’s VeloBrain and VeloRAIN systems already leverage AI and machine learning to monitor and optimize SD-WAN traffic, ensuring better performance by preemptively switching data paths and minimizing latency.

Interestingly, Arista has recently incorporated AI-driven load balancing and cluster performance features into its EOS platform, suggesting future integration with VeloCloud’s technology for seamless optimization.

Industry experts view the acquisition favorably. Herb Hogue, from US integrator Myriad360, described the move as a “strong step” that will provide clarity to VeloCloud’s customers, reassuring them of continued support and future evolution of the platform.

For existing VeloCloud users, the transition post-acquisition is expected to be smooth, with Arista already hosting the platform’s service status page. As Arista Networks incorporates VeloCloud into its broader networking ecosystem, Arista buys VeloCloud strengthens its position in an evolving networking landscape, particularly as AI continues to redefine enterprise and WAN operations.