Light Reading
New Cisco Intercloud offers infrastructure on which service providers, such as Telstra, can build their own differentiated cloud offers.

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
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
Flash Poll
From The Founder
Is your network built on 'The Old IP,' or are you part of 'The New IP' revolution?
LRTV Documentaries
A Cultural Shift for an OTT World

9|26|14   |   01:41   |   (3) comments


Telcos need to embrace a new approach to partnerships if they are to generate extra revenues quickly and give customers what they want.
LRTV Documentaries
New Skills Needed as Telecom, IT Collide

9|26|14   |   4:07   |   (1) comment


As telecom and IT collide, new technologies are emerging, new skills are needed and new opportunities for women are arising.
UBB Forum News
Do IP Networks Need An Overhaul?

9|25|14   |   02:01   |   (0) comments


As traffic levels ramp, do IP networks need new technologies and topologies?
LRTV Documentaries
Sprint Wields Its Influence in the Valley

9|25|14   |   3:09   |   (10) comments


Anne-Louise Kardas, Sprint's connection to startups in the Valley, explains how telcos can be innovative and find new opportunities with partners.
LRTV Documentaries
SDN, NFV & The Future of XO's Network

9|25|14   |   3:47   |   (0) comments


XO Communications COO Don MacNeil explains how cloud, SDN and NFV are altering its network requirements as well as changing data centers of the future.
UBB Forum News
The OTT Conundrum

9|24|14   |   01:39   |   (0) comments


What is holding back prosperous partnerships between telcos and the OTT players?
LRTV Documentaries
Putting Broadband to Work

9|24|14   |   01:26   |   (0) comments


High-speed broadband network rollout is key to telco strategies, but it's what happens after the network is built that counts.
Light Reedy
Light Reading's Women in Telecom Recap

9|24|14   |   0:55   |   (4) comments


Our first Women in Telecom breakfast was a huge success, and we hope you'll join us in London for the next event on November 6.
UBB Forum News
Monetizing Ultra-Broadband

9|24|14   |   01:43   |   (2) comments


Ultra-broadband networks need to be built, with fiber-to-the-premises the ultimate goal, but they need to be monetized, too.
LRTV Huawei Video Resource Center
Sales Director of INIT on Plug & Play Switch Devices

9|19|14   |   3:21   |   (0) comments


INIT Italy uses both the Huawei S5700 and S7700 series switches for the campus LAN environment. Sales Director Andrea Curti says their company chose these Huawei devices over others because of their performance, flexible scalability and plug-and-play features.
LRTV Huawei Video Resource Center
Saudi Arabia Upgrades Vocational Training System

9|19|14   |   3:31   |   (0) comments


The Technical and Vocational Training Corporation (TVTC) has 100,000 students, 150 government-owned institutions and oversees 1000 private institutes. The CIO of TVTC explains that Huawei devices have allowed them to manage multiple datacenters using just one software program, scientifically tracking the progress of students and teachers, saving them millions.
LRTV Huawei Video Resource Center
Huawei's Media Solutions Are Here to Stay

9|19|14   |   4:35   |   (0) comments


The current media revolution requires rapid upgrades in technology. New formats (HD, 3D, 4K etc.) and the subsequent explosion of file sizes demand sophisticated network and storage architecture. Social media and the multiple distribution channels require a robust asset management system. Gartner analyst Venecia Liu speaks about the current technological trends in ...
Upcoming Live Events
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
Half of the world's population will be connected to the Internet by 2017, but not just by smartphones and desktops.
Hot Topics
Facebook Pokes Around LTE Direct
Sarah Reedy, Senior Editor, 9/25/2014
Sprint Wields Its Influence in the Valley
Sarah Reedy, Senior Editor, 9/25/2014
US Ignite Cultivates Gigabit Apps
Jason Meyers, Senior Editor, Utility Communications/IoT, 9/25/2014
Comcast Turns Off Streampix
Mari Silbey, Independent Technology Editor, 9/26/2014
Like Us on Facebook
Twitter Feed