Cisco Purchase Could Bring Self-Service to Telcos

Cisco Systems Inc. (Nasdaq: CSCO)’s acquisition of newScale Inc. could be good news for telecom service providers wanting to enhance the self-service capabilities of their cloud computing services. (See Cisco Buying newScale for Cloud Smarts.)

Privately held newScale’s software creates a service catalog and self-service portal for IT organizations to use in buying cloud computing services. As telephone companies look to compete with Internet-based service providers such as Amazon.com Inc. (Nasdaq: AMZN), they will need to offer comparable tools that deliver their services on an as-needed basis.

“In general, I believe [the newScale acquisition] really does create new tools for Cisco to offer telcos,” says Sandra Palumbo, research fellow with Yankee Group Research Inc. . “Cisco has had a long relationship selling to telcos and is looking for that to continue, so while they can leverage this latest acquisition for direct offerings to enterprise and other channel partners, it also will allow them to offer new tools to telcos that in turn will be sold as part of broader business focused cloud solutions.”

Why this matters
Telecom service providers competing in the cloud arena are pitching their offerings as more secure and scalable, but they also need to be as nimble as Amazon.com, Rackspace , and others. Having software that facilitates a self-service portal provided by an established player such as Cisco will aid telecom operators in this arena.

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— Carol Wilson, Chief Editor, Events, Light Reading