Light Reading
Plans data center investments to enter cloud computing market dominated by Amazon.

Cisco Set to Launch Cloud Services

Ray Le Maistre
3/24/2014
50%
50%

Cisco is set to unveil a cloud computing service on Monday that will pitch the networking technology giant against the likes of Amazon Web Services LLC (AWS), according to a report in the Wall Street Journal.

And the router giant is looking to the telco sector to support the hosted offering, dubbed Cisco Cloud Services: It has already signed up Australia's Telstra Corp. Ltd. (ASX: TLS; NZK: TLS) and Canadian business services specialist Allstream Corp. as partners. (See Telstra Extends Cloud Capabilities With Cisco and Are Telcos Still Playing Cloud Catch-Up?)

According to the report, the vendor, which already sells its networking hardware to companies (such as telcos) that are building their own cloud services infrastructure, will invest $1 billion during the next two years on the data center infrastructure needed to support Cisco Cloud Services, which is due to be presented to potential customers today.

The move suggests that Cisco is feeling the impact of existing infrastructure-as-a-service (IaaS) offerings: As more companies sign up to use shared, hosted IT (compute, storage, networking) capabilities, so they have less need to invest in their own IT infrastructure, which for many includes networking hardware from Cisco.

By offering a cloud computing service, Cisco will, in effect, be leasing capacity on its managed infrastructure to enterprise customers, generating revenue from its products through a different business model.

The market for IaaS services is growing rapidly -- various industry projections put the annual growth at around 40%, while Cisco estimates the market was worth about $15.6 billion in 2013 -- and is starting to generate significant income for those that moved early. While Amazon doesn't report the revenues from its AWS division, analysts estimate that it generated sales of $1 billion in the fourth quarter of 2013.

Other companies that offer cloud computing services include Computer Sciences Corp. (CSC), Microsoft, Rackspace Hosting, Dimension Data, Verizon Terremark, CenturyLink Technology Solutions (formerly Savvis), HP, IBM, and many others. (See Verizon Scores Oracle Cloud Breakthrough, CenturyLink Cloud Goes Hyper, and Windstream Makes Regional Cloud Play.)

— Ray Le Maistre, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Editor-in-Chief, Light Reading

(4)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
3/25/2014 | 5:45:28 PM
Re: Late to the party?
sam masud -  That's not so off-the-wall. Cloud in data center business are not so different from each other.
sam masud
50%
50%
sam masud,
User Rank: Light Sabre
3/25/2014 | 2:55:00 PM
Re: Late to the party?
Mitch,

This might be totally off the wall, but Cisco already has a $5 billion data center business. Could it be be that offering cloud services in partnership with telcos like Telstra and Allstream is just a way for Cisco to further extend it data center business? Also a bilion dollar investment doesn't sound too bad if this whole Cisco cloud thing is being done with data center rival VMware in mind....

 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
3/24/2014 | 11:36:55 AM
Re: Late to the party?

$1 billion doesn't sound like a lot, given Cisco's size and the size of this market. If the investment is as small as it sounds to me, you have to wonder how well Cisco can compete with entrenched competitors. Perhaps Cisco is expecting its telco providers to kick in large investments as well?

Phil_Britt
50%
50%
Phil_Britt,
User Rank: Light Sabre
3/24/2014 | 10:46:09 AM
Late to the party?
Business analysts today were saying that Cisco might be a little late to the party with cloud services, with some companies already somewhat entrenched. The other factor that business analysts were mentioning was that IBM and several other companies were saying they offer cloud now.

Add to that all of the recent cloud-related IPOs, the slices of the cloud pie are shrinking, so how much of it Cisco will be able to grab is questionable.
Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
Jonestown
Mobile Backhaul: Going to the Dark Side?

10|30|14   |   2:26   |   (0) comments


Heavy Reading's Patrick Donegan shares his view on a dark trend that bubbled up at Light Reading's annual backhaul conference in NYC.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With CEO of SwitchCom

10|30|14   |   4:13   |   (0) comments


SwitchCom, an IT company based in Angola, recommends a variety of Huawei solutions and hardware to their customers in the energy industry.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Ethiopia's Ministry of Water Irrigation & Energy

10|30|14   |   4:08   |   (0) comments


Gosaye Mengistie of Ethiopia's Ministry of Water Irrigation & Energy discusses the collaboration with Huawei in that country.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Dongfang Electronics Corporation

10|30|14   |   5:46   |   (0) comments


Dongfang Electronics Corporation, headquartered in Chengdu, China, is one of China's largest manufacturers of power generators and contractors of power station projects.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview with Zimbabwe's Customers

10|30|14   |   3:31   |   (0) comments


Representatives of Zimbabwe's Ministry of Power and Development discuss the energy needs of their country as well as new areas of improvement due to enhanced ICT capabilities.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Colbún Chile

10|30|14   |   4:29   |   (0) comments


In Chile, an aging energy infrastructure was in dire need of a modern update. Claudio Valenzuela of Colbún discusses how Huawei's ICT solutions continue to provide crucial information to improve the grid and how an in-country engineer is a cricial asset.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With YuLiao

10|30|14   |   6:27   |   (0) comments


Yu Liao, chairman of the Chinese Association for Renewable Energy in Germany, discusses the role that ICT solutions play in helping to grow renewable energy resources in Germany.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview

10|30|14   |   2:54   |   (0) comments


Sifang has been working with Huawei on several projects. JingTao Wu, Assistant President of Beijing Sifang Automation Co. Ltd., believes that the cooperation with Huawei can facilitate Sifang's process of internationalization.
LRTV Huawei Video Resource Center
A Better Connected Smart Grid: Powering Laos

10|30|14   |   5:38   |   (0) comments


Representatives of Electricite Du Laos (EDL), a state-owned corporation, discuss the importance of ICT solutions in serving their country's energy needs.
LRTV Huawei Video Resource Center
2014 Huawei Electric Power Industry Summit: Interview With Junwei Lu

10|30|14   |   4:50   |   (0) comments


Professor Junwei Lu of Griffith University Australia describes his work with micro grid technology and the future of the power industry.
LRTV Documentaries
The Next-Gen Network Disconnect

10|29|14   |   01:23   |   (2) comments


There's a lot of talk about making networks more simple with SDN, NFV and next-gen broadband technology – but what about the complexity of introducing such capabilities?
LRTV Custom TV
Grow Your VPN Service Revenue

10|27|14   |   4:00   |   (0) comments


Watch how CSP product managers can better differentiate and maximize the value of their Internet, VPN and cloud services for business services customers, by adding premium application performance visibility to their data services.
Upcoming Live Events
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
February 10, 2015, Atlanta, GA
May 6, 2015, McCormick Convention Center, Chicago, IL
May 30, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Microsoft's Skype Embraces WebRTC on IE
Sarah Reedy, Senior Editor, 10/27/2014
FTC Slaps AT&T With Throttling Lawsuit
Sarah Reedy, Senior Editor, 10/28/2014
Wheeler Gets Down With OTT
Mari Silbey, Independent Technology Editor, 10/29/2014
China's MVNOs Hit the Wall
Robert Clark, 10/27/2014
Let's Not Kill SDN & NFV With Silos
Francois Locoh-Donou, Senior VP, Global Products Group, Ciena, 10/28/2014
Like Us on Facebook
Twitter Feed