How Broadcom’s Acquisition of VMware Is Impacting VeloCloud SD-WAN

Broadcom’s acquisition of VMware has been a hot topic in the cloud industry, to say the least. It seemed like it was on the horizon for a long time and in November of 2023, it finally went through. Since then, customers are understandably concerned about their investments in VMware after Broadcom implemented licensing changes around VMware infrastructure.

Check out this podcast with two industry experts for an overview on these changes and the impacts they’re having on end customers, or this blog post for VMware Update FAQs.

Most of the panic and hesitation in the market is around VMware’s cloud infrastructure, but let’s not forget that they also own VeloCloud SD-WAN and SASE!

I had the chance to speak to a couple of the VeloCloud Managed Service Providers (MSPs) about how this acquisition is specifically affecting VeloCloud and what changes we can expect to see moving forward.

We Are Bringing Back the “VeloCloud” Name

Sanjay Uppal, one of the original co-founders of VeloCloud Networks is now the VP and General Manager of the Software Defined Edge division at Broadcom. In February 2024, he announced that the SD-WAN and SASE platforms are bringing back the “old” VeloCloud name.

Did anyone ever fully stop referring to it as “VeloCloud?” I sure didn’t. Nevertheless, we can now rightfully refer to the platforms as VeloCloud SD-WAN and VeloCloud SASE.

Changes to VeloCloud SASE

We saw VMware appear on the 2023 SASE Gartner Magic Quadrant as a Niche Player and one of the cautions that Gartner stated was their security. The VMware SSE (Security Service Edge) features were never up to par with their competition. Even the VeloCloud MSPs that could offer the full VMware SASE solution (which were few) were hesitant to recommend their clients move forward with it. For the most part, VeloCloud SD-WAN was always paired with a 3rd party SSE solution like Check Point, Palo Alto, Zscaler, etc., for “best of breed SASE,” and these integrations will continue to be available.

Broadcom recognized the issues with VMware SASE and has scrapped the VMware security solution entirely in favor of another acquisition they made: Symantec. The full name of this platform is currently VMware VeloCloud SASE secured by Symantec, but like I mentioned above, we can refer to it simply as VeloCloud SASE.

So far, we understand that the integration between VeloCloud and Symantec will connect VeloCloud SD-WAN users to the nearest Symantec POP to secure their traffic. I’m excited to learn more about how these platforms will work together as our MSPs start evaluating and offering both.

Repatriation from Cloud Infrastructure

When I spoke with Matt Douglass, Senior Director of Solution Engineering at CBTS, VeloCloud’s 2023 North American Partner of the Year, he stated, “we are going to see a lot of movement in the next decade…moving compute back to the customer premise edge or the carrier near edge to facilitate all of the traffic AI and IOT we’ll be generating. It appears that VeloCloud will be an integral part of this.”

In the podcast I linked to above, Chip Hoisington (Head of Connectivity and Colo at Avant Communications) and James Ochoa (VP of Cloud at Flexential) agreed that they’re seeing what Chip refers to as a “repatriation” from cloud environments back to the edge, often in a colocation facility. James’ advice to companies is to “let the workloads be the guide,” meaning some workloads make sense to remain in the cloud and some make sense to sit at the edge.

With many companies adopting a hybrid environment, it’s important to make sure every workload within the organization is secure, whether it’s on premises, in a data center, public cloud, private cloud, or SaaS.

I mentioned this in my post reviewing the first ever SASE Gartner Magic Quadrant, but one of the cautions listed for Cato, one of the top SASE providers in the market, was that they didn’t have security at the edge at the time of gathering their information (they do now!). At the time, that sentiment was confusing for me because SASE and SSE are all about being cloud-based, but I understand their reasoning behind why edge security is imperative in a network security strategy if cloud is just part of the equation.

VeloCloud Licensing Changes

Since he represents a leading VeloCloud MSP, I made sure to ask Matt about whether we will see any VeloCloud licensing changes after the acquisition. After all, that is what’s causing major issues around VMware infrastructure.

“All of the VeloCloud service provider contracts remain in force, and we are good to go. The only change is that they have removed some of our month-to-month pricing and rental of the gear [VeloCloud edge devices], but we can absorb and handle this with no problem, so our offerings and services are all the same.”

Matt Douglass, Senior Director Solution Engineering, CBTS

It sounds like most of the contract licensing is staying the same. However, I can see how the changes they are making might lead to differences within the pool of VeloCloud MSPs. For example, Matt assured us that CBTS will still be able to offer month-to-month pricing and device rental and handle the logistics of that with Broadcom on the backend.

Will other MSPs do this for their customers? That’s something we’ll have to monitor as these changes roll out.

Am I Hesitant to Recommend VeloCloud Right Now?

The short answer to this is “no,” but I can’t say anything definitively.

After speaking to several of our VeloCloud partners on this topic, I have no reason to believe that their VeloCloud SD-WAN customers will be negatively affected by this acquisition. Of course, with any acquisition, there may be hurdles, but ultimately, our end clients are contracting and working with their MSP, not Broadcom. This gives them a layer of protection against the minor changes they are implementing.

If you want assistance in evaluating if VeloCloud or any other SD-WAN/SASE provider is right for your environment, fill out this form and I’ll get in touch with you to talk through it.