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Deutsche Telekom Capital Partners Bets On SD-WAN Future With Aryaka Investment

Global Software-defined wide-area networking (SD-WAN) vendor Aryaka is announcing today that it has completed a $45 million Series D round of financing led by Third Point Ventures and Deutsche Telekom Capital Partners (DTCP). DTCP is Deutsche Telekom ’s investment management group. With approximately $2 billion under management and advisory and a portfolio of over 70 companies, DTCP provides venture capital, private equity, and strategic advisory services to the technology, media and telecommunication sectors, according to Crunchbase. Jack Young, Partner and Head of Venture Capital at DTCP, explains its investment in Aryaka. “The SD-WAN market has turned a corner finally, and the time is right,” Young says. “Aryaka has built a global network backbone, which is a significant differentiation from the other SD-WAN vendors in the market.” SD-WAN is a rapidly growing market today in large part because enterprises need more flexible ways to connect their disparate physical locations to each other and to various cloud environments, both public and private.

SD-WAN (Source: Aryaka)

SD-WAN (Source: Aryaka)

Beyond the WAN The established approach for making such connections is the wide-area network (WAN). WANs give companies with distributed locations the ability to implement a single network that connects those locations to their headquarters. The established technology for such WANs is Multiprotocol Label Switching (MPLS). However, MPLS is now older technology, and is not up to the task of supporting modern, cloud-centric enterprise networks. To address this need, SD-WAN vendors like Aryaka, Cisco Systems CloudGenix, Riverbed, Silver Peak, and Talari provide the ability to abstract the wide-area connection, so that companies can mix and match MPLS and other connectivity options like the public Internet to dynamically connect their headquarters, branch locations, and cloud services to each other in secure, flexible ways.

Aryaka is a leader in this dynamic and burgeoning SD-WAN space, with over 100 percent year-over-year growth for five consecutive quarters, and over 500 enterprise customers around the world. Aryaka has built a global private network to provide stable and fast connectivity for mission-critical applications. This global network backbone, in fact, is what separates it from the pack. “Aryaka is unique in that it provides services on a global scale,” Young continues. “If you have offices in Ukraine, China, or Peru, for example – that’s where Aryaka shines.” Robert Schwartz, Managing Partner of Third Point Ventures, agrees with Young. “Aryaka is positioned perfectly at the tipping point of an enormous marketplace that is moving away from legacy MPLS technology and looking into next-generation solutions to help connect seamlessly worldwide to business-critical applications,” Schwartz says.

Telco Carriers’ Angle on SD-WAN From the perspective of leading global carriers such as Deutsche Telekom, Aryaka represents a path forward from MPLS. “We saw MPLS was ill-fitted for today’s migration to the cloud,” Young says. “SD-WAN is better suited for this migration.” Since Aryaka’s global network leverages carriers’ global telecommunications infrastructure, it could represent both a channel as well as a growth opportunity for global carriers. “We believe that companies like Aryaka can benefit from the strong European market presence of our corporate sponsor Deutsche Telekom,” according to Young. “DTCP is looking for proven companies. Aryaka is one of the early trend-setters.” As carriers continue their decades-long struggle to move up the food chain from ‘dumb pipes’ to value-added services, investing in SD-WAN solutions to mitigate the decline of the MPLS market is a logical step. Expect to see continued growth and turbulence in the SD-WAN marketplace over the next few years.   bron: