The age of network as a service: This startup can take your firm’s entire wide area network to the cloud

In recent years, we’ve gotten used to hearing about cloud computing: Data is stored on the cloud, software services are delivered on the cloud, and cloud computing platforms are all the rage. And now, the next level of disruption is here: entire wide area networks on the cloud.

An enterprise’s wide area network (WAN) connects computers across a large geographical area, covering multiple cities or even countries. The connections can be through telephone lines, leased cables, or satellites.

So far, large companies with branch offices in multiple locations had no option but to invest in expensive hardware architecture to run their WAN, as public broadband internet isn’t reliable for secure business networking. If a company needs to set up a new branch office, the capital expenses to get it plugged into a reliable WAN ranges from approximately US$10,000 to US$20,000. Depending on the speed of the private lines, the running cost can be US$200 to US$400 per MB of data volume transferred, which could easily come to US$5,000 per month or more.

A WAN on the public internet would cost only one-hundredth as much – about US$50 a month. But that’s not an option as business applications are bandwidth hungry, and it’s tough to control the network over the internet with an increasing number of employees working in different locations. How can a company get business-grade connectivity on a tight budget? That’s the question cloud networking services startup VeloCloud set out to solve.

Founded by technologists Sanjay Uppal, Ajit Mayya, and Steve Woo, VeloCloud came up with a disruptive solution that simplifies branch networking for enterprises by transforming ordinary broadband links into fast, resilient, and secure connections. The product, called VeloCloud Edge, bridges the gap between expensive WAN architecture and unreliable public broadband internet. Offered on a subscription model with zero capital expenses, VeloCloud Edge costs US$100 to US$250 a month depending on an enterprise’s requirements. “This can transform how businesses connect,” CEO Sanjay Uppal tells Tech in Asia.

Steve Woo, Sanjay Uppal and Ajit Mayya, the three founders of VeloCloud

The Chennai and California-based startup recently bagged US$21 million in funding from venture capital firms New Enterprise Associates (NEA) and Venrock as well as incubator firm The Fabric to disrupt the networking market with cloud-delivered WANs.

The Stanford-IIT-Wisconsin trio

All three co-founders are veterans in networking, infrastructure and security, as well as early cloud technologists. The two Indian co-founders, Uppal and Mayya, go a long way back. They were college buddies, who also worked together at Hewlett-Packard and WebVan.

“I started a ham radio in college,” recalls Uppal. “I was always fascinated by technology and its applications.” He studied electrical engineering at the Indian Institute of Technology (IIT), Bombay, where he met Mayya.

Uppal went on to get a master’s degree from Stanford University, and then another one from the University of Wisconsin. Before starting up, he ran the publicly-traded OnMobile Global as its president and COO.

Mayya, who did an MS in Computer Science from the University of Wisconsin after graduating from IIT, was vice president of engineering for YouWeb, an incubator of mobile technology companies, including iSwifter/Agawi.

Uppal and Mayya were toying with the idea of a cloud-based WAN disruptor, itching to start up, when they met Steve Woo at The Fabric. Woo holds an MBA and MSEE from Stanford University, and a BSEE from Cornell. He led the cloud strategy at Aerohive Networks after it acquired Pareto Networks, a cloud-based networking innovator, where he headed the product division. “Steve was also thinking along the same lines as Mayya and me. The Fabric introduced us and we clicked,” Uppal recalls. The trio hit the road running, and in less than a year, built VeloCloud Edge.

Thanks to their proven expertise in the field, it wasn’t tough to find investors to back VeloCloud either. “A huge market, an elegant new approach, and a savvy team that is focused on executing a vision – these are the tenets of a great startup and that’s what we see in VeloCloud. Whether it’s provisioning new branch sites or cloud data centers, VeloCloud’s cloud-delivered WAN gives enterprises the agility to compete, increases application policy controls and reduces the cost of business-grade connectivity,” says Doug Dooley, venture investor at Venrock.

Creating smarter cities

Across the globe, there is more and more talk of building smart cities. The new Indian government has earmarked INR 76 billion (US$1.25 billion) for the development of 100 smart cities across the country. The vision is to use new data technologies to usher in a better and more sustainable lifestyle. The cloud can be a big enabler in this scheme of things as disparate agencies have to collaborate seamlessly to make a city work smart. Besides, it can offer affordable solutions for rolling out digital infrastructure.

Wim Elfrink, Cisco’s executive vice president of emerging solutions, spells out statistics that underscore both the problem and the potential: “Worldwide spending on infrastructure and construction is about US$2 trillion a year, and information and communication technology (ICT) spending is just one-and-a-half to two percent of that. But over the next decade, we will continue with advances in cloud computing, big data, and open data, and we will see 50 billion devices connected through machine-to-machine communication, which will foster the industrialization of the internet.”

Giants like Cisco and IBM have taken the lead in building smart cities in conjunction with governments, and they are always on the lookout for new technologies. Steve Woo, in fact, has been in and out of Cisco through acquisitions of two companies where he was earlier working, Riverhead Networks and Class Data Systems. But what his latest company VeloCloud has come up with is a fundamentally different way of doing this.

Gartner and Forrester Research peg the combined enterprise WAN equipment and private WAN services market at US$32 billion. This business runs on expensive WAN architecture, and VeloCloud is out to disrupt that, not only by lowering the costs but operationally too. A cloud-based WAN offers more flexible networking solutions in the age of mobility and cloud-based services. It is very difficult for a traditional WAN, with data stored in a corporate data center, to provide connectivity to mobile workers on different platforms as well as to SaaS (Software as a Service) and IaaS (Infrastructure as a Service) vendors.

The VeloCloud answer is to provide a Network-as-a-Service solution, which can also be thought of as a hybrid WAN. What it does is to use both terrestrial lines as well as internet links – choosing the best paths and uptimes through real-time monitoring. This ensures that the network is reliable, even though it piggybacks on the internet. In other words, the VeloCloud system is intelligent enough to figure out how to use multiple routes, links, and other resources for best results. Besides, it takes no time to set up unlike a traditional WAN.

“Our product can aggregate lowest cost Internet, 3G/4G/LTE and WiFi, as well as leased lines. It can be deployed in minutes, operated with existing private and cloud data center gateways, and scaled from one teleworker site to thousands of enterprise branches. It lets companies automatically mix-and-match circuits and providers on the fly, independently by branch, with no manual reconfiguration,” Uppal explains.

VeloCloud’s customers are a diverse lot, from Rockford Construction to Coca-Cola to governments.

Three allocations in the recent Indian budget excite Uppal: the push for internet in rural India, improved connectivity on trains, and of course, the 100 smart cities. Uppal and his team do not mind shuttling between the VeloCloud headquarters in Los Altos, CA, and its development center in Chennai, India, as opportunities are opening up rapidly before them. Their WAN rides on the economy of the Internet with the flexibility of the cloud, and that is something enterprises in India and elsewhere have been waiting for.

See: India sets up $1.6B fund for startups, backs a new era of software product innovation

The age of network as a service: This startup can take your firm’s entire wide area network to the cloud