- Arista confirmed rumors it’s acquiring Broadcom’s SD-WAN unit VeloCloud
- It wants to revamp its SD-WAN product for the complex AI networking landscape
- VeloCloud could also allow Arista to pursue the Secure Access Software Edge (SASE) market
Another telecom M&A enters the fray. Arista Networks announced Tuesday it will acquire VeloCloud, Broadcom’s SD-WAN unit – a move that comes as Arista aims to revamp its SD-WAN strategy for AI networking.
Financial terms of the deal were not disclosed, but reports in May indicated the VeloCloud assets could be worth up to $1 billion. VeloCloud, which Broadcom snagged as part of its VMware acquisition in 2023, has been a mainstay across managed SD-WAN offerings, AvidThink Principal Roy Chua previously told Fierce.
Arista currently specializes in data center routing and switching and cloud networking. Its SD-WAN product meanwhile is “decent but not particularly groundbreaking,” Chua said in May.
With VeloCloud in its arsenal, Arista will beef up its portfolio with a range of new Ethernet ports and speeds (1G, 10G, 25G), features that support both 5G and Wi-Fi connectivity and other “integrated security and wireless options,” according to Arista CEO Jayshree Ullal.
Arista rethinks SD-WAN
The advent of AI has fundamentally changed the concept of a user and site in a wide area network (WAN), she explained in a blog. WAN sites could be located in laptops, smartphones, an airplane or “any other location on the move.” AI agents will be able to collect data across these sites – including the public cloud – adding “extra layers of complexity” in WAN networking.
“In today’s AI era, customers need more than traditional SD-WAN,” Ullal said. “WAN silos will no longer be viable, as traffic caused by generative AI in data centers (either on-premise or hosted in the cloud) will increasingly impact the WAN.”
It’s not too surprising Broadcom offloaded VeloCloud. SD-WAN is “not a high-growth area” as the company’s top priorities are the cloud and virtualization, J.Gold Associates founder Jack Gold recently told us.
The SASE opportunity
VeloCloud allows Arista to not only dive deeper into enterprise WAN but also pursue the larger secure access software edge (SASE) market, said Mauricio Sanchez, research director of SD-WAN and SASE at Dell’Oro.
Arista could even take a step further and wade into the Security Service Edge (SSE) segment, which he said is projected to exceed $10 billion in revenue in 2025.
But that would require additional investment – either organic or via another acquisition. Arista must be careful not to throw too many eggs across multiple baskets if it wants to keep up in the AI networking race.
“Enterprise WAN and SASE target very different buying personas,” said Sanchez. “As Arista pivots into these adjacent markets, it must avoid diluting resources or missing its core AI opportunity—a balancing act that will test execution discipline.”