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Cisco's Cloud Bet: What's in It for SPs?

Mitch Wagner
3/25/2014
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Service providers struggling to implement a cloud strategy can look to a buddy for help. Cisco wants to be that buddy. Cisco this week introduced Intercloud, a strategy to enter partnerships with service providers to go to market together with cloud services for the enterprise. Cisco plans to invest $1 billion over the next two years on infrastructure to implement Intercloud. (See Can Cisco Help SPs Offer Cloud-based Apps?)

Together, Cisco and its partners will offer application services such as virtual desktop, firewall, remote management, and more.

"When you look at the service provider world, it's pretty clear that as the market matures it's impossible to build everything in-house," Fabio Gori, Cisco director of cloud marketing, told Light Reading.

The business opportunity for service providers is twofold: To resell Intercloud to the SP’s own customers at a markup, and also to build addition cloud offerings using Intercloud as a platform, Cisco says.

Cisco and Service Providers, Buddies
(Source: Julie Brown)
(Source: Julie Brown)

But partnering with Cisco could present problems for service providers looking to differentiate from their competitors, Heavy Reading analyst Rosalyn Roseboro said. “Operators keep saying they’re concerned about differentiating, but if they’re going to leverage a platform being offered to everyone, that doesn’t solve the differentiation issue,” she said. “Using the same stuff as everyone else is using doesn’t get them there.”

Service providers might well succeed as cloud brokers, helping customers figure out the best cloud services for their workload, Roseboro said. In some cases, it might make sense for enterprise customers to run Amazon Web Services. In others, enterprises might be well served on Intercloud, some other platform, or the service provider’s own cloud. Service providers might partner with Cisco for small and mid-sized enterprise businesses, but handle the big customers on the SP’s own network, Roseboro said.

Internet of everything
Cisco sees Intercloud as an opportunity for service providers to take advantage of the Internet of Everything, with exploding demand by enterprises for services and bandwidth. "Some of these applications have to deal with billions of things and trillions of events," Gori said. "Any network, even the biggest in the world, will be destroyed by all this traffic coming in to even the biggest data centers." Cisco wants to help service providers beef up their networks and data centers to meet the onslaught.

Intercloud offerings from service providers will prominently feature the Cisco brand, Cisco says. The cloud fabric will be built on the Cisco Application Centric Infrastructure (ACI). (See Cisco's ACI Gets Physical With SDN.)

Intercloud will use Cisco's own data centers, along with its partners', to blanket the world. "We have no intention of building data centers all the way across the globe, and even if we wanted to, we would simply be an American company doing business with a foreign country," Gori said. "By working with local players we will have a more compelling proposition in the marketplace."

For a service provider like the Australian Telstra, one of Cisco's Intercloud partners, Cisco installs the entire stack, including ACI, open stack libraries, hardware, software, and interoperating with the service provider's existing business system. Cisco also operates the cloud infrastructure in that kind of partnership, Gori said.

Other partners will use the existing Intercloud infrastructure and connect over high-level APIs to offer applications to customers.

Cisco will have more details on Intercloud at his Cisco Live event in San Francisco, May 18-22.

Early reports about Intercloud positioned it as competitive with Amazon Web Services. But Cisco doesn't see it that way. Amazon provides bare metal virtual servers, so to speak, with an infrastructure as a service (IaaS) offering. Cisco is mainly offering application software as service (SaaS), a higher level than Amazon’s. Although Intercloud will also offer PaaS and IaaS, but those are not central to Intercloud, Gori said.

"Amazon has an infrastructure centric proposition, we have an application centric proposition,” Gori said. “We are not competing with Amazon. We are competing with other kinds of clouds. We are more like VMware, or HP Cloud.”

Among the services available from Intercloud are collaboration, security, network infrastructure management, virtual desktop, cloud DVR (see Cisco Cloud DVR Emerges), virtualized mobile Internet, virtual PCs, firewall and provider edge services, remote management, and energy management.

Of course Intercloud runs on teh Intarwebz.

— Mitch Wagner, West Coast Bureau Chief, Light Reading. Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile Follow me on Facebook Got a tip about SDN or NFV? Send it to mwagner@lightreading.com.


Want to learn more about SDN and the transport network? Check out the agenda for Light Reading's Big Telecom Event (BTE), which will take place on June 17 and 18 at the Sheraton Chicago Hotel and Towers. The event combines the educational power of interactive conference sessions devised and hosted by Heavy Reading's experienced industry analysts with multi-vendor interoperability and proof-of-concept networking and application showcases. For more on the event, the topics, and the stellar service provider speaker lineup, see Telecommunication Luminaries to Discuss the Hottest Industry Trends at Light Reading's Big Telecom Event in June.


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Susan Fourtané
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Susan Fourtané,
User Rank: Blogger
3/29/2014 | 12:03:41 PM
Re: Intercloud
Mitch, 

I'll take some pictures from Interop London for you. :D

-Susan  

 
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
3/27/2014 | 6:40:48 PM
Re: Intercloud
Nice! I'll be in Las Vegas next week. To tell the truth, I like Vegas but I'd rather be in London. 
Susan Fourtané
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Susan Fourtané,
User Rank: Blogger
3/27/2014 | 3:21:02 AM
Re: Intercloud
Mitch, 

How nice that you are going to Interop. :D I will be looking forward to reading about your findings.

This year Interop is held for the first time in London in June as part of the London Technology Week. Needless to say I have already made arrangements to attend Interop London and the other shows. :) 

-Susan 
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
3/26/2014 | 4:05:46 PM
Re: Intercloud
Susan - I don't know if I'll be going to Cisco Live. Right now I'm gearing up for Interop next week. 
DHagar
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DHagar,
User Rank: Light Sabre
3/26/2014 | 1:56:29 PM
Cisco's Cloud Bet: What's in it for SPs?
@sam masud, that is what I am seeing in this picture as well.  This is Cisco's vision which works fine for Cisco, but I am not sure that the customer is always going to want the Cisco defined packages; when they are other options available that serve their needs differently. 

I agree with you that the Internet of Things will be an opportunity; I see it more of a utility as well - but if Cisco is successful in building the functional networking, with the right pricing, they can be the leader.

But I don't see that as being in the SPs best interests - which is why I think the SPs will be in the strongest position to build a "solutions" role for themselves in selecting the best networking, etc., in addition to distinguishing their individual service packages and pricing.  I think SPs need to clearly establish their roles so they are the winners.

 
sam masud
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sam masud,
User Rank: Light Sabre
3/26/2014 | 1:30:02 PM
Re: Cisco's Cloud Bet: What's in it for SPs?
But as the Internet expands (exponentially?) with the Internet of Things will service providers want the high capex that comes with Cisco's gear--particularly if Cisco does not fully embrace SDN, which Cisco pooh-poohs?
nasimson
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nasimson,
User Rank: Light Sabre
3/26/2014 | 12:50:49 PM
differentiation
>  "Operators keep saying they're concerned about differentiating, but if
> they're going to leverage a platform being offered to everyone, that
> doesn't solve the differentiation issue," she said.

@ Mitch,  I can see where the HeavyReading analyst is coming from.

IMHO, the service providers can still differentiate on the apps they choose to offer on the Intercloud, the pricing models they choose to offer, the customer service levels they maintain and the web of ancillary services they build.
DHagar
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DHagar,
User Rank: Light Sabre
3/26/2014 | 12:08:29 PM
Cisco's Cloud Bet: What's in it for SPs?
Susan, Intercloud sounds like a "smart" networking solution for Cisco, doesn't it?  I think their vision with the "Internet of Things" is on target.

 
Susan Fourtané
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Susan Fourtané,
User Rank: Blogger
3/26/2014 | 11:33:07 AM
Intercloud
Mitch, 

As we enter the Intercloud era the Cisco Live event in San Francisco sounds interesting. Are you attending? 

-Susan

 
DHagar
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DHagar,
User Rank: Light Sabre
3/25/2014 | 6:13:09 PM
Cisco's Cloud Bet: What's in it for SPs?-2
PS - Part 2 - when I am referring to networks, I am meaning solutions other than Cisco's.
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