AT&T, Microsoft Ventures back networking startup SnapRoute in $25 million round

SnapRoute, a startup that offers software organizations can use to centrally manage and deploy applications on top of “white-box” data center switches that aren’t made by incumbents, is announcing that it has closed $25 million in new funding. Strategic investors AT&T and Microsoft Ventures have come in on the deal; Norwest Venture Partners led the round, and previous investor Lightspeed Venture Partners also participated.

The startup has been picking up lots of new business since its launch last year, Lightspeed partner John Vrionis told VentureBeat in an interview. “When I gave [SnapRoute] money a year and a half ago, it was just a dream. Big customers are using it, and the market is coming his way in a hurry,” Vrionis said.

“His” refers to Jason Forrester, formerly global data center network manager at Apple and now the founder and chief executive of SnapRoute. The startup now has roughly 32 employees, Forrester told VentureBeat in an interview. Forrester figures that the startup has around 35-50 customers, and its software is being used on 12,000-13,000 switches. He declined to name any of SnapRoute’s customers, but Facebook employees have repeatedly mentioned the company’s software by name in recent months.

Facebook, of course, has been pushing for more open data center hardware through its Open Compute Project (OCP). The idea is to become less reliant on companies like Cisco and Juniper, which sell expensive switches that only run proprietary hardware. Apple joined the OCP in 2015. Forrester said he “definitely cannot speak to any commercial engagement with Apple.”

In any case, the startup’s goal of giving organizations more power over their networking operations does have precedent. The OpenStack open-source cloud software has provided tools for operating virtual networks, and Forrester points to open-source Quagga as a more direct comparison. After all, SnapRoute offers open-source software, as well as hardened versions. But he said hardware vendors — particularly Arista — actually come up frequently in conversations with prospective customers. Other companies with switches that can support SnapRoute include Accton, Celestica, and Quanta. The only thing that’s necessary is a Linux operating system.

If companies are going to maintain their own clouds rather than moving to public clouds, they’re being told they need to operate more like public clouds, and that means more reliability and less downtime, not just cost savings, Vrionis said.

Sure enough, Forrester said, while Cisco’s code runs to 30 million lines of code or more, SnapRoute’s takes up perhaps 100,000.

Vrionis sees an opportunity to challenge the switching market leader. “Cisco’s core business is dying,” he said. The company recently acquired application performance management (APM) software provider AppDynamics for $3.7 billion.

Based in Palo Alto, California, SnapRoute is now exploring moves beyond data center networking into areas like wide-area networking (WAN) and campus networking, Forrester said. And if enough companies ask for a hardware-software bundle, then SnapRoute just might comply and announce such an offering, he said. To date, the startup has raised a bit less than $30 million.