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.