Inside The Multicloud Networking Market: Stakeholders And Innovators (Pt. 2)

Cloud Inside The Multicloud Networking Market: Stakeholders And Innovators (Pt. 2) R. Scott Raynovich Contributor Opinions expressed by Forbes Contributors are their own.

R. Scott Raynovich is the Founder and Chief Analyst at Futuriom. com Following New! Follow this author to stay notified about their latest stories.

Got it! Nov 1, 2022, 12:46pm EDT | New! Click on the conversation bubble to join the conversation Got it! Share to Facebook Share to Twitter Share to Linkedin (Note: This is Part 2 of a two-part series on multicloud networking (MCN). In Part 1 we looked at the market opportunity. Part 1 is here .

) A week ago we outlined some of the big opportunities for networking software players to take advantage of key trends in cloud, especially in the hybrid cloud and multicloud markets. The continued growth of digital transformation and cloud operating models means that organizations want to expand and connect to multiple clouds, but traditional networking technology is not equipped to do that easily or economically. With the number of cloud connections multiplying rapidly, MCN innovation is needed to introduce automated, software-defined ways to connect and control connectivity among clouds.

Key Stakeholders in the MCN Movement There are many types of different organizations looking to build MCNs. We already see a new ecosystem of providers taking place to help move MCN and hybrid cloud networking (HCN) along. The opportunity to increase the agility, velocity, and security to extend networks across clouds has attracted many stakeholders.

The list of the stakeholders who are all incentivized to have clouds become better connected, reaches far and wide across the industry. For example, here are all the players involved in the MCN and HCN movement: Datacenter and colocation facilities. Datacenters have become the key places for Web and hyperscale cloud services to interconnect with each other and with any organizations looking to use the services.

Increasingly, organizations are interested in leveraging datacenter and colocation providers for networking as well. After all, if cloud apps and data are in the same datacenter, it’s easier to connect them inside the datacenter than it is to build discrete circuits to them. Examples include Equinix Cloud Fabric , Digital Realty ServiceFabric, and CoreSite Open Cloud Exchange .

Public cloud infrastructure. Public cloud infrastructure in the form of platform-as-a-service (PaaS), infrastructure-as-a-service (IaaS), and software as a service (SaaS) is expanding to provide trillions of dollars of resources and services to enterprise end users, and organizations have become more confident in moving large portions of their IT infrastructure to the cloud. But now public cloud players have been looking to extend their networking capabilities to extend to resources that aren’t as cloud friendly, such as the enterprise edge and IoT environments.

Examples in the public cloud include Google Anthos , Amazon Outposts , and Azure Stack Edge . Enterprise campus and private datacenters. Initially, it was enough for webscale datacenter technology to be extended to the enterprise edge using technology such as software-defined wide-area networking (SD-WAN).

But that’s just the starting point for networking virtualization. Enterprises would like to easily extend their logical and virtual networks to include multiple clouds, private datacenters, or any webscale services. They must adapt and integrate.

MCN and HCN technologies will be key to integrating the islands of networking into one logical unit. This is an area to watch as the SD-WAN and SASE movement preview the upcoming use of MCN and HCN to build larger, virtualized networks. Recommended For You 1 The Inside Story Of Papa John’s Toxic Culture More stories like this Fewer stories like this 2 Embedding “Proactive Vigilance” Into The Pentagon High-Tech Supply Chain More stories like this Fewer stories like this 3 Philadelphia Museum Of Art Craft Show Returns With A Focus On Fashion More stories like this Fewer stories like this Middle-mile and last-mile NaaS services .

As cloud services – including IaaS, PaaS, and SaaS – proliferate, enterprises need faster ways to connect to them. Waiting months to provision private-line circuits from service providers is no longer an option. An emerging group of network-as-a-service (NaaS) providers makes it easier to connect to cloud points of presence (PoPs) and onramps with clicks of a mouse, via software-defined networking (SDN) automation platforms.

NaaS is part of the MCN ecosystem used to dynamically provision, manage, and control connectivity among enterprise networks, private datacenters, and public clouds. Examples include Megaport and Packet Fabric. I would also include managed services providers with SD-WAN and SASE capabilities, such as Aryaka Networks.

Public and private wireless services. Billions of dollars are currently being invested in next-generation 5G networks, both on the public and the private side. Futuriom research (see below) indicates that use cases such as smart retail, smart manufacturing, computer vision, and edge analytics will drive demand for these high-bandwidth and low-latency edge services.

But in many cases, the data gathered at the edge will be connected to other cloud services and applications hosted in datacenters. This will drive demand for MCN and HCN solutions that can more rapidly and securely connect edge networking and wireless networks into cloud networks. Examples include AT&T Edge Compute , AWS Edge Compute , Cradlepoint Wireless Edge , Microsoft Azure Private Multi-access Edge Compute (MEC) , and Verizon Mobile Edge Compute (MEC) .

MCN startups . We’ll dive into this in more detail in the next section. Key Companies to Watch: Private Companies On the vendor side, there is plenty of opportunity to provide the many stakeholders with innovative technology to build out MCN.

Because many public cloud networks are proprietary and prone to “lock in,” this leaves opportunities for MCN and HCN solutions to become the bridge among multiple cloud infrastructures. Our recent detailed MCN report dives deep into the companies to watch in the MCN space, which are likely to be key suppliers to the stakeholders outlined above. These companies include traditional networking companies pivoting to MCN as well as a group of talented startups.

As with many markets before it, innovation in MCN will likely be concentrated in the startup space, with incumbent networking and software vendors looking to make acquisitions. Here are some of the key startups to watch: In addition to some of the companies above in the datacenter and NaaS space, the leading startups we are tracking in MCN include Alkira, Arrcus, Aviatrix, Graphiant, Prosimo, and Versa Networks. Here is a summary of their recent activities: Alkira was founded n 2018 by brothers Amir and Atif Khan, who are well known in the networking community for building many products at Cisco, Juniper, and SD-WAN pioneer Viptela, which was sold to Cisco in 2017 for $610 million.

The Khans were early innovators in the SD-WAN market, where they came up with the idea of scaling virtual private networks (VPNs) by separating the network control plane from the data plane, which drove adoption of SD-WAN for enterprises to connect branches. Alkira has raised $70 million to date. Arrcus has raised a total of $73 million and has a top-flight list of strategic investors, including Liberty Global, SamsungNext, and SoftBank.

Arrcus has a partnership with VMware and recently introduced an MCN solution called FlexMCN, which consists of ArcEdge as a secure data plane software, ArcOS for robust routing, combined with ArcOrchestrator (which is now available on premises and off premises) to help simplify and expedite the setup of cloud operations. Aviatrix has raised a total of $340 million and led by networking market veteran Steve Mullaney (VMware, Nicira, Palo Alto, Cisco, etc. ), Aviatrix has an expansive vision for MCN that includes network connectivity, management, visibility, and security.

At a recent analyst event in New York City, Aviatrix disclosed that it had more than 62 Global 2000-caliber customers and at the end of Q2 was producing $62 million in annual recurring revenue. These numbers make Avaitrix one of the market leaders in terms of funds raised and customers disclosed. Graphiant is one of the newer startups in the MCN space.

It was founded in 2020 and has raised $33. 5 million from Sequoia Capital, Two Bear Capital, and Atlantic Bridge. Graphiant founder and CEO Khalid Raza was a cofounder, CTO, and product architect at Viptela.

Graphiant is pursuing a unique networking approach known as “stateless core,” in which it splits out the IP routing control plane as a function in the cloud, while providing tags for applications at the edge, enabling organizations to set up high-performance networking overlays over IP Transit and cloud networks. Prosimo is led by former Vipela VP of Product Ramesh Prabagaran, who is CEO and cofounder. It has raised a total of $55 million investors including General Catalyst, WRVI Capital, and Nepenthe Capital.

The Prosimo Full Stack Cloud Transit provides orchestration of cloud networking services, zero-trust security, and network monitoring and visibility features that can span multicloud and hybrid cloud environments. Versa Networks is thought of as a SASE player, but Versa CEO Kelly Ahuja and Cofounder Kumar Mehta pointed out recently that their technology has MCN use cases, with a full routing and security stack that can be used to build networks across any cloud . Versa is a promising pre-IPO company that just announced it has raised $120 million in new funding from funds managed by Blackrock and Silicon Valley Bank.

What About the Incumbent Networking Vendors? A lot of the larger incumbent vendors are also trying to solve pieces of the MCN puzzle, but for most of them it will require a larger strategy of integrating the pieces in their portofolios. It’s also likely that many of them will have to acquire more parts via M&A, including potential acquisitions of the companies we listed above. One such event has already happened.

In 2021, F5 Networks bought Volterra. F5 now says its Edge 2. 0 platform “represents the first open edge architecture, enabling DevOps and developer teams to seamlessly shift workloads across clouds and even to data centers, without reimplementation or retooling, enabling the largest scale and best performance possible.

” Among the incumbents, expect a large number of public companies to further develop MCN capabilities – including Arista Networks, Cisco , Juniper Networks, HPE , IBM , and VMware. VMware may be the best positioned incumbent for MCN because it has many of the pieces of the puzzle in its portfolio and it is a pure software company. If it can effectively stitch together VeloCloud, Tanzu (Kubernetes), and cloud networking with NSX, this would be a compelling multicloud platform.

The combination of NSX with VeloCloud SD-WAN can be used to connect multicloud and hybrid environments. NSX and VMware Tanzu can be used to create application-layer MCNs and service meshes. VMware has partnerships with both Arrcus and Aviatrix, so it will be interesting to watch how these partnerships evolve.

VMware’s forthcoming acquisition by Broadcom (expected in the next few months) is also a curveball that could go either way. Broadcom is one of the largest purveyors of networking silicon but also has a growing portfolio of network management and NetOps software, so that could make the combination more interesting. Cisco is still digesting many of its enterprise and SD-WAN acquisitions, including Viptela and Meraki, and has yet to prove it can integrate the software management platforms of these acquisitions.

Cisco competitor Arista Networks has positioned its CloudEOS as a MCN solution that can be used to build both multicloud underlay networks using routing as well as application-layer overlays. Its management system, CloudVision HPE is in a similar position and is in the process of integrating its Aruba edge products with security functions such as SASE in the Silver Peak SD-WAN product line. Juniper, likewise, has SD-WAN and SASE portfolios as well as firewalls and cooud networking capabilities, so it’s a natural fit for MCN.

IBM has a full portfolio of cloud management products, including Red Hat, and has been developing a strategy for multicloud – though networking is not yet a core element. IBM Cloud Satellite, for example, uses an API to create a distributed cloud location, then add host machines from any cloud, on-premises datacenter, or from the edge. Red Hat could become a pillar to MCN by adding more networking functionality.

As you can see, this presents a large and complicated group of companies pursuing the MCN space. In the future, we would expect more cooperation and integration all of the stakeholders and MCN players in this vast ecosystem. It’s going to be an active space with lots of combinations and deals.

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