CloudGenix Wraps $65 Funding Round, Challenges 'Disappointing' Cisco

CloudGenix, the software-defined wide area networking (SD-WAN) vendor, will use a large portion of its recent $65 million round of funding to expand its channel.

The San Jose, California-based company just announced a Series C funding round, led by new investors like ClearSky and several pre-existing investors.

CloudGenix boasts a 300 percent year-over-year revenue increase and a 90-plus percent win rate competing enterprise customers against “incumbent legacy networking vendors.”

Enrique Salem, partner at Bain Capital Ventures, said CloudGenix provides cost savings of 50-70 percent, a “proven product” and a strong go-to-market presence.

“As large enterprises adopt a multicloud strategy, the need to implement SD-WAN has become a top priority for CIOs who are navigating the complexities of managing their overall cloud infrastructure,” Salem said.

Founder and CEO Kumar Ramachandran told Channel Partners that his company will pour money into its go-to-market efforts, particularly the channel. CloudGenix already works with VARs and several master agents, such as Intelisys, Avant, Telarus and TBI — and it plans to add more masters.

CloudGenix’s Kumar Ramachandran

“We plan to aggressively continue that investment, very specifically in the U.S. Both with the VAR as well as the master agent community, we already have a big presence,” he said. “The plan is to go deeper with our existing master agents and also go broader and bring on board some new master agents.”

Patrick Oborn, Telarus co-founder and vice president of partner experience, called CloudGenix’s solution a “powerful application-based” offering.

“CloudGenix SD-WAN is a critical capability for customers migrating to the cloud or using UCaaS for voice and video,” Oborn said. “As CloudGenix unlocks the economics of broadband connectivity, we couldn’t be more thrilled to see CloudGenix’s rapid growth and funding.”

Avant Communications president Drew Lydecker said his company’s latest State of Disruption study showed SD-WAN adoption as “accelerating rapidly.”

“CloudGenix SD-WAN provides an innovative application policy model for networking and security that simplifies operations and lowers costs within this environment of disruption around legacy networks,” Lydecker said. “Avant’s channel of trusted advisers is excited to continue to offer CloudGenix’s solutions to our customers to help them navigate this accelerating pace of change.”

Ramachandran said the company also is expanding on the product side. One key category is security. CloudGenix already offered its own firewall but has teamed up with Palo Alto, Zscaler and Symantec to offer integration with the SD-WAN platform.

Opportunity is opening up as the master agents put more focus on security, Ramachandran said. CloudGenix partners that have already provided Palo Alto or Zscaler to a customer now have an inroad to sell them SD-WAN thanks to the integrations.

“Look for us and our partners to be very aggressive both on the network as well as the security side,” he said.

Another opportunity is managed services. Ramachandran said CloudGenix offers a carrier-neutral managed service that incentivizes customers to quit their incumbent legacy networking vendors.

“As a customer, you can get the benefits of a managed offer but complete freedom in terms of which carrier and connectivity options you want to choose,” he said. “That way you can get best-of-breed.”

CloudGenix has set its sights on winning over Cisco customers. Ramachandran, a former Cisco employee, said the networking giant has created an opportunity for competitors that differentiate themselves. He criticized Cisco for being slow to deliver on integration promises.

He added that Cisco’s SD-WAN product portfolio, which includes IWAN, Cisco Meraki and Viptela, confuses partners.

“There [are] five or six product offers without really a coherent strategy, so the channel and the customer are left trying to figure which is the right …

… product for the right customers,” Ramachandran said.

He noted that Cisco-purchased Meraki co-founder Hans Robertson left the company to join the CloudGenix advisory board.

“Candidly, Cisco has been disappointing both customers and the channel when it comes to SD-WAN,” he said.

IHS Markit’s latest SD-WAN leaderboard puts CloudGenix at No. 14 in revenue with a year-over-year growth of 44 percent.

Analyst Sterling Perrin told Light Reading that one of the challenges of being a younger company is sheer accumulation of references that incumbents like Cisco have gathered over the years. Although channel partners and customers value technology, they may resort to checking which vendors their peers choose to work with, Perrin said.

“Buyers are getting confused; they’re looking for more clarity and simplicity about how they deploy these things. Why take the big risk when there are options out there? Service providers are looking to play it safe with vendors,” he said.

CloudGenix said it has multiple Fortune 1000 customers across various industries.

Rival vendor Cato Networks recently announced a $55 million investment from Lightspeed Venture Partners and other investors.

To learn more about CloudGenix’s SD-WAN offering, see what the company’s director of channel sales says makes it stand out.