The deal is expected to be completed in the final quarter of 2018 with no effect on Dell-owned VMware's fiscal guidance for the year.
VeloCloud was valued at US$320 million earlier this year at a point when it said it had more than 600 customers and 50,000 installations.
Prominent customers include AT&T, Sprint, Mitel, TelePacific, Windstream, Vonage and MetTel.
He said Cisco’s recent acquisition of Viptela, and now VMware’s acquisition of VeloCloud, validated this point. "They can’t get there from here, meaning legacy network technologies and approaches cannot make the leap to WAN transformation. But there is an even bigger shift that is emerging alongside the SD-WAN, and that’s the shift from branch-centric and wired WANs to pervasive and wireless ones."
"In the digital era, a new networking approach is required to solve the hyper distribution of applications and data, as we move from a model of data centres to one of centres of data at the edge," said Pat Gelsinger, chief executive officer, VMware.
"At the heart of VMware's networking strategy is the belief in delivering pervasive connectivity with embedded security that connects users to applications wherever they may be. With the addition of VeloCloud's industry-leading SD-WAN technology, we will be able to extend the VMware NSX approach of automated, secure, and infrastructure-independent networking to the WAN."
Sanjay Uppal, chief executive of VeloCloud Networks, said: "Enterprises are transforming how they architect and utilise their infrastructure, with a shift towards a cloud-delivered, software-defined model.
"This enables organisations to have a globally consistent infrastructure regardless of where it is deployed - from the data centre and the cloud to the edge.
"We look forward to helping VMware, the leader in software-defined infrastructure, in the next evolution of the company's networking and NFV strategies."