Aviatrix Is Going Big On Multi-Cloud


Steve Mullaney, the CEO of Aviatrix Inc., engenders neither timidity nor lack of confidence. Speaking forcefully with a smile on his face and with the Prudential Tower looming behind him in his Boston office (on Zoom, of course), he barked out optimism about the forthcoming explosion of the cloud networking market (Mullaney, a native Bostonian, shares time between the East Coast and Silicon Valley offices).

“We’ve won,” said Mullaney in a recent interview. “It’s over. We’re raising $200 million! I’m massively expanding. The market opportunity is huge!”

Yes, Mullaney and Aviatrix are going big. Santa, Clara, Calif.-based Aviatrix today announced it has raised another $200 million at a whopping $2 billion valuation in a round led by TCV. Mullaney points out that his company’s recent funding shows that his investors have confidence in the size of the multi-cloud networking market.

It makes senses. As Mullaney points out, fundamental cloud technology platforms – supporting databases, artificial intelligence, and cybersecurity — have yielded huge investments and valuations of tens of billions of dollars for recently minted public companies such as Snowflake, Palantir, and Cloudflare. As I have pointed out, many of these companies are riding the explosive growth in recurring revenue streams as large organizations increasingly outsource their data and information technology (IT) to the cloud.

Mullaney says it’s now time for the networking, the fundamental but often forgotten technology, to take over in the cloud.

“You’ve got to be dominant in one layer of the [cloud] stack. Networking is the last one people think about, but it’s the most important.”

When Mullaney took over as CEO at Aviatrix in 2018, he focused on building a multi-faceted networking platform targeted at cloud infrastructure, sold as a service in the cloud. The was straightforward, but in truth, few people were doing it. Networking market leader Cisco Systems has moved more of its revenue to software, but it is still thought of as a seller of hardware. Many of the networking companies in the first wave of software-defined networking (SDN) had been bought up by traditional networking companies and relegated to the role of features in their operating systems. Nobody had yet built an entire networking system based in the cloud.

Taking Networks Inside Clouds

When I first met Mullaney in Palo Alto back in 2019, his vision was that networking was about to undergo a massive transformation, rather than a more minor technology transition, from a box-and-operating system model to a cloud software model. Aviatrix pivoted toward the opportunity to provide Fortune 500 and other companies with a single platform to connect a large number of networks, whether it was on-premises networks built with legacy routers and Ethernet switches, or virtualized networks connecting their applications and infrastructure in the cloud.

FuturiomSteve Mullaney Back in the Fray: The Futuriom Q&A

Nothing has changed, Mullaney says. If anything, the trend has accelerated. “I haven’t changed my story. I was right.”

The opportunity is indeed large, surely in the tens of billions of dollars. Research firm IDC reported recently that spending on dedicated cloud infrastructure increased 14.7% year over year in 1Q21 to $4.8 billion, with 45.5% of this amount deployed on customer premises. IDC expects that cloud environments will continue to outpace non-cloud throughout its forecast.

The central premise that networking will catch up to cloud has been identified by Futuriom’s end-user research. A survey late last year (2020) showed that the key drivers of multi-cloud networking (MCN) are providing more options for multi-cloud and hybrid cloud (according to 69% of respondents); consolidating data-center with public cloud infrastructure (69%); improving the performance of distributed applications (65%); and managing security policy and visibility (61%). We’re preparing another survey right now with results that will be available next month.

The bet on MCN is that networks will need to follow the cloud. Cloud leaders such as Amazon, Google, and Microsoft all have their own proprietary networks that run on different systems and are challenging to connect together.

Top use cases of MCN, according to Futuriom end-user survey feedback, include security integration and virtual firewall management, multi-cloud application integration and performance assurance, network visibility, security analytics, and unified multi-cloud network monitoring and management.

This fits with Aviatrix’ plan to become a full-fledged multi-cloud networking platform for multiple clouds, providing security and monitoring of all connections, no matter what cloud they are in – all with software and no boxes. Mullaney sees Aviatrix eventually usurping the dominance of the current enterprise networking players such as Cisco, Juniper, and VMware, since those companies are focused on on-premises networks and private data centers, not public cloud networks.

Who Gets the Cloud?

Aviatrix has grown. Fast. With about 300 employees and a paying 550 customers, Mullaney projects the sales force growing to more than 60 people soon. Customers include big names such as Raytheon, Teradata, Avis Budget Group, and SoFi. Aviatrix is estimated to have revenue in the tens of millions of dollars and will probably soon climb toward $100 million in annual revenue with this next round. True to Mullaney’s vision, Aviatrix may soon be the largest cloud networking company existing entirely in a “cloud-native” way – providing and selling its software to customers from the cloud, on a metered-usage basis.

“They don’t understand the cloud,” says Mullaney, speaking of incumbent competitors Cisco and VMware. “Their architectures support only one cloud. Enterprises manage their infrastructure across multiple clouds. The business is driving it.”

Mullaney backs this up from data he says was supplied by his investors (he says the data is private) that shows that 84% of enterprises are using hybrid cloud and that 80% are using at least two clouds per day.

“People want one architecture,” he says, “when they go out at those branches and the data centers as an extension of cloud.”

Targeting a Multi-Billion Dollar Market

How big is this market? As noted previously, it’s at least in the tens of billions of dollars, at a minimum. Futuriom’s own work shows that one area of virtualized networking, the software-defined wide-area networking (SD-WAN) market, has grown quite rapidly, and is now more than $2 billion a year in new software and hardware services designed to guide, secure, and optimize Internet and cloud connectivity for enterprise branches. But SD-WAN is arguably a niche market, targeting enterprise branch networking but not connectivity inside of public cloud operations. Additional functions such as multi-cloud connectivity, cloud firewall management, and public cloud network visibility are additional use cases targeted by Aviatrix but not the current SD-WAN providers.

Some of the cloud networking market will be a replacement of traditional enterprise “boxes” – routers and switches – which will no longer be needed because many enterprise networks will shift over to cloud networks, leveraging the massive infrastructure being built by infrastructure-as-a-service (IaaS) providers such as Amazon Web Services (AWS), Microsoft, Google, and Oracle. But just as cloud created entirely new use cases, cloud networking will simplify enterprise networking by enabling organizations to tie together the network resources in all clouds. Aviatrix provides many of the software tools that help managers connect, secure, and monitor the vast networks they connect to inside the IaaS cloud platforms.

Aviatrix’ biggest competitor may not be Cisco or VMware at all – but the cloud providers themselves. AWS and Azure have been rapidly expanding the functionality of their networks, providing secure VPNs and WAN connectivity across the globe, where customers can hook into their networks in regional points of presence (PoPs). But the IaaS cloud providers are loathe to enable connectivity…


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