Cloudflare’s Nefeli Buy Perks Up the MCN Market
The multicloud networking (MCN) world is aflutter with Cloudflare’s purchase of Nefeli Networks, a little-known company grown out of the labs in Berkeley, Calif. This comes as part of a new wave of product launches from Cloudflare.
First, let’s talk about why it matters. Cloudflare is a fast-growing public company with a $34 billion market cap and lots of interest from cloud infrastructure investors. The deal has raised eyebrows in the industry and is drawing attention to the MCN market, which is gaining momentum because it solves the difficult problems of maintaining visibility, control, and security over infrastructure that spans hybrid and multicloud environments, including both public cloud and private infrastructure.
In other words, if Cloudflare does it, people take notice. Cloudflare has a history of being ahead of the curve in identifying key emerging markets. If they are placing bets on multicloud, something must be happening.
Pumping Up MCN
The bottom line is that this announcement throws more momentum behind the MCN market.
Other large public companies have also recently increased their activity in MCN. For example, F5, with an $11 billion market cap, has also been talking up MCN lately, making it a big part of its strategic focus to provide networking and security across clouds. Aviatrix is demonstrating return on investment (ROI) for its distributed cloud firewall. And Prosimo has been busy adding AIOps capabilities. It looks like the market is heating up. And Cloudflare wants in on the party.
"Nobody's ever heard of Nefeli, but this is fantastic," said Steve Mullaney, the former CEO (now retired) of MCN pioneer Aviatrix. "When a $33 billion market cap company jumps in, it's great for the market."
Prosimo, for its part, also noticed. Prosimo CEO Ramesh Prabagaran made reference to the deal on LinkedIn, in which he said "I love that MCN (Multi-Cloud Networking) is becoming an exciting segment. We welcome all new entrants... " Prabagaran listed the many feature requirements for the market, implying that a complete platform will be needed to compete.
Chris McHenry, VP of product management with Aviatrix, also chimed in. He sent us this in an email:
- "This latest acquisition is further validation of the growing multicloud networking and security market. We saw Cisco’s acquisitions last year and now Cloudflare."
- "It’s also another example of the growing convergence of networking and network security that’s being driven by enterprise requirements as they migrate to and expand in cloud(s)."
Did Shenker Make Nefeli Magical?
In a press release, Cloudflare said the purchase of Nefeli “fast tracks” its entrance into multicloud. It's now officially a part of a product that Cloudflare calls Magic Cloud Networking.
Nefeli may not be well known, though members of its founding team have significant technical credibility. As mentioned, Nefeli cofounder and chairman Scott Shenker is a well-known researcher and professor at UC Berkeley who was once the CEO of software-defined networking (SDN) pioneer Nicira (where the aforementioned Mullaney was also the CEO, oddly enough). Shenker’s bio says he has a Ph.D. in experimental physics, and his research has spanned performance modeling, networking, and game theory. Berkeley has been a hotbed of open-source technologies that later became commercialized, including SDN, Apache Spark, and eBPF (extended Berkeley Packet Filter).
Shenker is also well known in Silicon Valley venture capital circles for his role at Nicira and as a cofounder of Databricks, yet another Silicon Valley unicorn. So it's clear he's not lacking in funding or connections.
What's amazing is that Nefeli kept a low profile and only raised about $10 million in funding. Nefeli almost looks like a spin-in, in which a larger company leverages a startup's capabilities and then buys it after specific landmarks. Cloudflare said it started working with Nefeli early on as part of its Workers Launchpad program, which assists in startup development.
For its part, Cloudflare says that Nefeli is an MCN platform “focused on reducing the complexity of IT and DevOps teams by providing a unified network management layer for cloud infrastructure deployments.” By integrating Nefeli with Cloudflare, the company says it will be able to grow Cloudflare as a central platform to connect and manage any cloud network.
We’ve requested a briefing with Cloudflare to get more up to speed on the specifics, because there are already a lot of established MCN vendors in this area with comprehensive approaches, including Aviatrix, F5, and Prosimo – among others.
In the meantime, this is good for the MCN market. Cloudflare making a deal in MCN means its customers are asking for solutions. As hybrid and multicloud architectures advance, this demand will only grow.
