& cplSiteName &

Can Cisco Help SPs Offer Cloud-based Apps?

Dan O'Shea
3/24/2014
50%
50%

Cisco Systems has confirmed to Light Reading that it is launching a $1 billion cloud services effort focused on creating an application-driven "cloud of clouds," aimed at service provider partners and enterprises. (See Cisco Set to Launch Cloud Services.)

By creating the infrastructure to deliver cloud-based apps, the new Cisco Systems Inc. (Nasdaq: CSCO) initiative could particularly appeal to network service providers that have yet to roll out their own cloud services, by giving them a platform on which they can develop differentiated services.

Mike Riegel, vice president of marketing at Cisco Systems Cloud, says the Cisco Global Intercloud will (no surprise here) be built on the Intercloud platform the vendor announced in January. This enables cloud users to move resources between different types of clouds -- public, private or hybrid (See Cisco Goes Soft With APIC, Intercloud Announcements.)

He adds that some of Cisco's $1 billion commitment will go toward building data centers built using Cisco's own hardware, storage and computing solutions, with Cisco becoming its own good customer at a time when it is being challenged in its core hardware business. Riegel says Cisco will offer further details of its data center build-out plan at Cisco Live in May.

Cisco is making this move because it sees the cloud services market moving beyond infrastructure as a service, or merely providing compute, storage or even network services, Riegel says. "The cloud market has moved on," he comments. "Today it's all about providing business-specific apps provided from the cloud with good customer experience." (See Verizon: Major Apps Move Cloud-ward in 2014.)

The vendor plans to offer its Global Intercloud via its own channels, as well as a band of Cisco Cloud Services partners, a group that already includes Australian telco Telstra Corp. Ltd. (ASX: TLS; NZK: TLS). "The first thing our service provider customers will tell you is that you can't go it alone any more," Riegel says. "So, for example, customers will be able to get a whole range of offerings from Cisco, from Telstra and from all of the other partners in Intercloud. Cisco will go to enterprise customers, but service providers will also be able to create their own offerings on top of Cisco capabilities and bring them as their own brand or co-brand them with Cisco." (See Telstra Extends Cloud Capabilities With Cisco.)

Cisco will need to coordinate with its service provider partners, and vice versa, to ensure service differentiation, but Riegel says the intent is to create a broader selection of cloud services, each with their own added value, for customers. "It's about what the application workloads are," he says. "We'll mix and match with our service provider partners to make them successful."

Those partners also will be able to leverage Cisco's managed threat defense capability, announced last week, to scan security threats across distributed cloud environments. They will also be able to use this distributed infrastructure to comply with regulatory requirements that restrict where data can and can't be stored.

"We're in the post-Snowden era," Riegel says. "Increasingly, companies are wanting data to stay in the country of origin. We can enable that."

The announcement may be the latest and biggest indicator that the networking hardware giant is undergoing a major philosophical shift in what it produces and how it sells the fruits of its labor. "Everyone competing on the same infrastructure basis -- that's not an interesting market any more," Riegel says. "We're evolving to a services/solutions/software model. We will continue to be successful in infrastructure."

In the cloud market particularly, he acknowledges that Cisco needs to be much more than an "arms supplier, as we have done in the past." As for potentially competing with its service provider customers by selling direct to enterprises, Riegel says the cloud market will be like other markets, such as video and conferencing, where Cisco goes to market in multiple ways, and does so successfully.

— Dan O'Shea, Managing Editor, and Carol Wilson, Editor-at-Large, Light Reading


Want to learn more about carrier cloud services? Check out the agenda for the Big Telecom Event (BTE), which will take place June 17-18 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.


(7)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
sam masud
50%
50%
sam masud,
User Rank: Light Sabre
3/25/2014 | 3:23:12 PM
Aha!
Dan,

You write: "He adds that some of Cisco's $1 billion commitment will go toward building data centers built using Cisco's own hardware..."

Seems to me this is a great way for Cisco to increase its data center business--particularly if you're competing with VMware.

 

 
C Chappell
50%
50%
C Chappell,
User Rank: Blogger
3/25/2014 | 9:32:55 AM
Cisco and Intercloud
Heavy Reading research shows that telcos are lagging when it comes to having the kind of cloud infrastructure they need to compete with the cloud leaders, ie an infrastructure that is low cost enough, highly integrated, based on the latest and most innovative technologies and that leverages carrier network strengths. Only a handful of telcos, cf Verizon, are prepared to invest in building such infrastructures themselves. A high proportion of early adopter telco cloud providers started out with VCE and the idea of having a common inter-cloud provider, VCE-based infrastructure is not new. At the same time, telcos have also been struggling with the SaaS broker opportunity, a point not lost on Huawei and NEC which already have cloud app partner programs. So the fact that Cisco is sharpening its strategy on all these fronts is unsurprising. It is a channel partner play (for infrastructure) that is taking Cisco into IBM/Softlayer, HP and Microsoft territory - but arguably with added carrier networking kick.
DOShea
50%
50%
DOShea,
User Rank: Blogger
3/24/2014 | 5:19:28 PM
Re: Whatever did we do before apps?
That's a good question, and is maybe the eternal question regarding Cisco. Cisco has said in the past enterprise customers don't want to be stuck with one cloud environment. They want to use private, public and hybrid clouds of their choice depending on the workload, which is why Cisco wants to manage the stitching between those clouds. They seem to be looking for a business model for the day when no one has use for their hardware anymore, though they might put it differently.

I'm starting to think they carefully outline service provider partnerships for us just because we keep asking if they are going to compete with their provider customers or partner or what. Maybe in the market, the conflict rarely comes up, since we never actually hear much about something like "Cisco hit on a Verizon customer, and Verizon got mad." --Does this ever actually happen?

No, I don't think this does answer your question.
Carol Wilson
50%
50%
Carol Wilson,
User Rank: Blogger
3/24/2014 | 4:53:06 PM
Re: Whatever did we do before apps?
Here's their explanation: The telcos can take the Cisco platform and add their services - voice, conferencing, data - to the package to differentiate, and then sell it to the enterprise folks they are already providing data services to, as part of the package. 

There is no doubt that telecom service providers are now including cloud services in the data/managed service sales pitches. I realize some people - including one on this thread - are serious skeptics as to whether they can succeed at this. 

As for Cisco competing with its customers, they do it all the time now, selling gear direct to enterprises and through channels that their SP also package and sell with their data services. I don't know how Amazon would respond to this, but they continue to seem unfazed by cloud competition from the telecom sector.

 
brookseven
50%
50%
brookseven,
User Rank: Light Sabre
3/24/2014 | 4:47:13 PM
Re: Whatever did we do before apps?
Dan/Carol,

Why does Cisco think that the carriers have a better into Enterprise Cloud Apps than Cisco itself does?  Isn't Cisco one of the worlds largest vendors to the Enterprise already?

As described this seems to be a channel play, when you already have one of the largest direct Sales Forces calling on the exact same customer.  Or am I confused somehow?

Maybe as a better way of describing my confusion, would be to parrot back Carol's comment with.  If Cisco can sell some Cloud Stuff to Enterprises, who cares what caririer is the bit pipe for it?

seven

 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
3/24/2014 | 4:44:21 PM
Compete with own customers
Cisco seems to be running the risk of competing with its own customers here, most notably Amazon.
Carol Wilson
50%
50%
Carol Wilson,
User Rank: Blogger
3/24/2014 | 3:42:35 PM
Whatever did we do before apps?
Now the cloud-world is ready to go app-crazy. Service providers could well find it appealing to turn to a known quantity but if this is going to be a significant set of future servcies, do you want it built on a single vendor's technology?
Educational Resources
sponsor supplied content
Educational Resources Archive
From The Founder
The independent evaluation of Nokia's key virtual network functions (VNFs) was a defining moment for the Finnish giant.
Flash Poll
Live Streaming Video
Charting the CSP’s Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it’s going from two industry veterans.
LRTV Documentaries
Leading Lights 2016 Highlights

5|25|16   |   02:26   |   (1) comment


Some of the high points from this year's Leading Lights awards dinner at the Hotel Ella in Austin, Texas.
LRTV Documentaries
Light Reading Hall of Fame 2016

5|23|16   |   05:43   |   (0) comments


Find out who has been welcomed into Light Reading's Hall of Fame this year.
LRTV Custom TV
ZTE TM Forum Highlights

5|23|16   |     |   (0) comments


ZTE showcased its new ICT solutions at TM Forum in Nice.
LRTV Interviews
Gamma's MD on the Emergence of UC2

5|20|16   |     |   (0) comments


Gamma Communications Managing Director David Macfarlane believes the unified communications (UC) market has reached a tipping point.
LRTV Custom TV
The Ultimate 5-Minute Guide to Digital Customer Engagement

5|20|16   |     |   (0) comments


In this short video, you will hear all about how Digital Customer Engagement is the key to meeting customer expectations, keeping them happy, and maximizing revenue. VP Product & Marketing at Pontis, Ofer Razon, breaks down for us the five essential capabilities for successful Digital Customer Engagement. Don’t miss!
LRTV Custom TV
NFV in 2016: Part 1 – NFV Use Cases Get Real

5|19|16   |   05:57   |   (0) comments


Consensus is building around the key use cases for NFV, including managed IP services at the network edge and on customer premises, which can generate new revenues from enterprises/SMBs and consumers; Evolved Packet Core to support LTE migration; and adjacent technologies, such as TAS and IMS, to support VoLTE and next-generation charging and policy control ...
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 3

5|19|16   |     |   (0) comments


Steve Vogelsang discusses the challenges of operational transformation and how Nokia helps its customers. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Level 3: Why UC Is In Demand

5|17|16   |   04:12   |   (1) comment


Andrew Edison, Level 3's senior VP of sales, EMEA region, talks about the drivers of growth in the unified communications services market.
LRTV Custom TV
ARM's OPNFV Action

5|17|16   |     |   (0) comments


At the ARM booth at MWC 2016, Joe Kidder and Bob Monkman speak to Light Reading about OPNFV and their upcoming action.
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 2

5|16|16   |     |   (0) comments


Steve Vogelsang gives advice to service providers on how to move to NFV. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Interoute CTO on NFV's Maturity

5|13|16   |   06:46   |   (1) comment


Matt Finnie, CTO at international operator Interoute, explains how NFV has made life easier in terms of logistics and how Interoute can now enable a 'software-defined moment' for its customers.
LRTV Huawei Video Resource Center
UBBS 2016 Highlights

5|12|16   |     |   (0) comments


Highlights of Huawei's UBBS event in Hong Kong.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
December 6-8, 2016,
June 16-18, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
Hot Topics
DT: Telcos Must Escape Vendor Prison
Iain Morris, News Editor, 5/24/2016
AT&T to Start 5G 'Friendly' Trial by 2016 End
Dan Jones, Mobile Editor, 5/24/2016
WiCipedia: Short Skirts & Back-Up Plans
Eryn Leavens, Special Features & Copy Editor, 5/20/2016
Eurobites: Be More European, EU Tells Streaming Services
Paul Rainford, Assistant Editor, Europe, 5/20/2016
Cable Is Eyeing Its Retail Options
Mari Silbey, Senior Editor, Cable/Video, 5/25/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
Animals with Phones
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.