Arrcus Lands Ayyar as New CEO, Softbank Investment – Forbes

Arrcus, a cloud networking company focused on connecting and scaling edge infrastructure, has announced it has picked Shekar Ayyar, the former executive vice president and general manager of Telco and Edge Cloud business at VMware, as its new CEO. Arrcus has also announced that Liberty Global, SamsungNext, and SoftBank are joining as strategic investors.
The combination of Ayyar and new investors signals that Arrcus has hit a high-growth stage and is ready to focus on large-scale Web and service provider networking installations that need to adapt to the demands of edge networking. Much of this demand will be driven by 5G capacity as well as connectivity with cloud platforms and applications, Futuriom research shows. Arrcus has been on our Futuriom 40 list of the top startups in cloud infrastructure.
Ayyar will succeed Devesh Garg, who as CEO and co-founder guided the company from early stage into growth stage. Garg, a Broadcom veteran, founded the company in 2016 along with chief architect Derek Yeung and CTO Keyur Patel. You can read Futuriom’s interview with Garg and Patel here.
Shekar is a well-known executive in the networking and cloud space with decades of technology experience. His roles at VMware included general management, strategy, M&A, business development, and research. He was instrumental in VMware’s acquisition strategy, overseeing more than 60 M&A transactions and investments, including the acquisitions of Nicira, AirWatch, and VeloCloud.
The amount invested by the new strategic investors was not disclosed, but prior to that Arrcus had raised $45 million in venture funds. Patel, a co-founder and former Cisco veteran well known in networking circles for his innovation in routing technology, publicly embraced Shekar in a statement.
“Shekar is a passionate technology leader with a proven track record of translating strategy into execution and corralling high-performing teams to deliver results,” said Keyur Patel, founder and CTO, Arrcus, in a statement. “On behalf of Arrcus employees and the board, I am excited to have him join us as our CEO at this important time.”
I spoke with Ayyar earlier this week about the opportunity and he said that he actually wasn’t looking for a new job, but that he found Arrcus when looking at potential new investments for a SPAC he has developed, so they started talking.
“I didn’t intend to jump into a CEO role this quickly, but I would not have taken anything else other than Arrcus,” Ayyar said in an interview on Zoom. “It’s game changing. It’s a diamond in the rough. The layer at which we are operating, the [network operating system], is similar to what VMware did on the compute side. It’s transition the underlying infrastructure to a different form of efficiency.”
Former VMware excutive Shekar Ayyar has taken the CEO role at Arrcus.
Arrcus is targeting the needs of next-generation networks that need high-bandwidth, secure edge connectivity to handle new apps such as low-latency content delivery, artificial intelligence (AI) processing, and automation. Its closest competitors include Cisco and Juniper Networks, as well as other startups such as DriveNets, which is targeting service provider routing in the cloud. DriveNets recently raised a $200M+ round at a valuation more than $1 billion. Like DriveNets, Arrcus differs from both Cisco and Juniper by selling a cloud-based software solution without hardware.
Although Arrcus has not disclosed many customers, it is known to have both current and potential customers in high-scale networking opportunities in industry verticals such as retail, finance, Software-as-a-service (SaaS), and telecommunications networks. The company has developed key technology in a hot area: segment routing multi-protocol label switching (SR-MPLS) and SR-v6, the next generation of routing technologies that will serve to deliver faster processing and better quality of service for edge networking.
Arrcus technical staff, including Patel, have been instrumental in several new patents for virtualized routing. An interesting one to look at to understand the Arrcus approach might be “Best path computation offload in a network computing environment,” which can be viewed here. Patel is also active in the Internet Engineering Task Force (IETF), where he was appointed chairman of the Border Gateway Protocol (BGP) working group. BGP is a critical routing technology used in most Internet, cloud, and edge networking installations.
Arrcus is also one of the few cloud routing startups that has been tested in proofs-of-concept and interoperability demonstrations along with Cisco and Juniper. 
Arrcus has also been focused on lowering the cost of ownership of networks. It provides its networking software as a network operating system (NOS) that runs on commodity off-the-shelf (COTS) hardware platforms based on Broadcom chips.  The NOS contains a full management and automation stack that can be run from the cloud, providing orchestration and analytics.
With the move to recruit Ayyar as well as its new strategic investors, Arrcus is signaling that it’s time to deploy edge networking at scale. In discussions with enterprise and service provider end users, it’s clear that real-world demand these technology is growing to facilitate the expansion of lower-cost networks in to industry verticals to facilitate a number of data-heavy applications.
The reasons for this are multi-faceted: 1) With 5G, the amount of connected devices, content, and applications is about to explode; 2) Retail, financial, and industrial companies are building out new edge infrastructure to provide automation and edge compute functions; 3) The proliferation of cloud services is driving new demand for devices and networks to connect directly to other clouds.
Arrcus is teaming up with a number of strategic investors in the telecommunications and webscale world, which indicates that’s where its strengths lie. In company statements, Arrcus provided backup from investors and potential customers who endorsed the technology.
“Arrcus Connected Edge with the underlying routing-centric architecture has a promising role to play in the evolution of our gigabit fixed networks and 5G mobile networks, enabling next-generation edge computing services for our customers,” said Adrian Drury, MD, Technology Strategy, Liberty Global.
“Arrcus has made rapid progress with its portfolio of networking software solutions whose compelling feature capabilities are widely applicable to us as we build future mobile networks,” said Keiichi Makizono, CIO, SoftBank Corp., in a release. “We are excited by its massive potential to significantly impact the communications infrastructure industry and are pleased to add Arrcus to our strategic portfolio of innovative companies.”
Arrcus did not disclose the total new capital from its strategic partners – Liberty Global, SamsungNext, and SoftBank. They will join existing investors, Clear Ventures, General Catalyst Partners, and Lightspeed Venture Partners.
It seems likely, however, that news about new customers and partnerships will be coming soon, which is common after a new CEO takes over and the company’s positioned for the next stage of growth.

R. Scott Raynovich is the Founder and Chief Analyst of Futuriom, an independent cloud technology analysis firm. He has been following technology markets as an analyst and

R. Scott Raynovich is the Founder and Chief Analyst of Futuriom, an independent cloud technology analysis firm. He has been following technology markets as an analyst and writer for 25 years. In the past he was a partner and Editor in Chief of Light Reading (Lightreadng.com) as well as New York Bureau Chief for Red Herring magazine during the heyday of the 1990s tech boom. He has won several industry awards, including a Folio award and an Editor & Publisher award for Best Business Blog. His analysis has been featured by prominent media outlets including Bloomberg, CNBC, NPR, The Wall Street Journal, and the San Jose Mercury News.

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