Cloud enablement

Cisco Opens Up the CloudVerse

Cisco Systems Inc. (Nasdaq: CSCO) is moving to take over the cloud the same way it's taken over many networks.

Cisco is launching CloudVerse, a set of technologies for building and managing cloud networks, during a webcast Tuesday morning. CloudVerse is targeted both to enterprises -- for managing their own virtualized networks ("private clouds" is the cooler way to put it) -- and to service providers, which would then offer cloud services to their enterprise customers.

In general, the idea is for Cisco to provide tools that make it easier and faster to set up, manage and interconnect clouds.

Alcatel-Lucent (NYSE: ALU) touched on some of those ideas with CloudBand, the set of cloud-management products introduced in November. (See AlcaLu Unveils Its Carrier Cloud Play and Analyst: AlcaLu Could Have a Cloud Hit.)

And really, it's a theme that most of the big equipment vendors seem likely to jump on.

"We're seeing it from companies like Nokia Networks . We're seeing it from companies like Huawei Technologies Co. Ltd. I went to Carrier Cloud Forum India, and Huawei was talking about things very similar to this," says Ari Banerjee, an analyst with Heavy Reading .

Of course, interest is coming from the software side, too, from companies such as Oracle Corp. (Nasdaq: ORCL), Banerjee says. Part of the reason for all the interest is that cloud management lacks a wide base of standards. OpenStack has made some progress at providing a cloud operating system, but really, it's open season on the details of running a cloud.

Cisco stands out because of its ubiquity in networks. In a sense, CloudVerse is simply Cisco trying to extend its network dominance into the cloud. "The challenge, obviously, is that people might not want to go for an end-to-end Cisco play," Banerjee says.

Cisco describes CloudVerse as more a response to the need to manage the cloud's compute, storage and networking resources in harmony. "We saw that you couldn't keep these elements apart any more," says Simon Aspinall, Cisco's senior director of cloud marketing.

Several CloudVerse customers will be participating in (or will at least get mentioned in) Cisco's Tuesday launch, including service providers Orange Business Services , Telecom Italia (TIM) , Telefónica SA (NYSE: TEF), Telstra Corp. Ltd. (ASX: TLS; NZK: TLS) and the Terremark piece of Verizon Communications Inc. (NYSE: VZ). (See Verizon Keeps Terremark Brand on Cloud.)

On the enterprise side, Cisco is announcing customers ACX (a Xerox Corp. (NYSE: XRX) company), Fujitsu Ltd. (Tokyo: 6702; London: FUJ; OTC: FJTSY), Qualcomm Inc. (Nasdaq: QCOM) and Silicon Valley Bank , among others.

Running the cloud
So what's in CloudVerse exactly? Some highlighted features include:
  • Cisco Intelligent Automation for the Cloud (CIAC), tools for the provisioning of services. CIAC is part of a wider framework called Cisco Unified Management, which includes automation and orchestration software, including technology from two Cisco acquisitions: newScale (service catalogs and service-provisioning portals) and Tidal Software (tool for monitoring application performance to detect problems ahead of time).

  • Cisco Network Services Manager, which handles virtualization of the data center's networking elements (routers, switches, load balancers, firewalls, etc.). It can set up provisioning and policy universally, so that all these pieces don't have to be configured individually.

  • Cloud-to-Cloud Connect, a way of letting data centers connect to the cloud more dynamically. A key ingredient here is Cisco's Network Positioning System (NPS) being added to the ASR 9000 and 1000 routers. NPS, originally introduced on the CRS-3 core router, searches the network/cloud for alternative resources when capacity limits get reached. (See What's So Big About CRS-3?)

  • Pre-tested applications: Cisco has about 50 of them ready to add to CloudVerse, Aspinall says. These are meant to help kick-start a carrier or enterprise's cloud offerings. The examples Cisco intends to emphasize on its webcast deal with enterprise collaboration.

The equipment vendors are only scratching the surface of what they could do in managed services, Banerjee says. He expects them to take over more of that sphere in the future, possibly even running the services themselves on a service provider or cloud provider's infrastructure.

— Craig Matsumoto, West Coast Editor, Light Reading

cnwedit 12/5/2012 | 4:47:15 PM
re: Cisco Opens Up the CloudVerse

It will be interesting to see how service providers balance their need for immediate help in more easily managing all the piece parts of a cloud services operation with their concern about not getting locked into a single vendor in an end-to-end approach.

The fact that all these big vendors are rushing to provide comprehensive services makes me thing that's what service providers are asking their vendors for, even as they talk more publicly about wanting open approaches.


Pete Baldwin 12/5/2012 | 4:47:14 PM
re: Cisco Opens Up the CloudVerse

Cisco is also emphasizing that they won't host the Hosted Collaboration applications; that's up to the service providers (with the exception of WebEx.) 

But to Ari's point -- might that be a logical next step for the equipment providers? They wouldn't compete with service providers' clouds; it would be more like a white-label relationship. Would that make sense, or would it be just insane?

Pete Baldwin 12/5/2012 | 4:47:14 PM
re: Cisco Opens Up the CloudVerse

I'm on the Cisco webcast, which is ending now... they've got a text Q&A box going that's drawn a couple of good questions.

One, apparently from a reseller, is: Why shouldn't we just offer Huawei products instead? :)  (Cisco's answer: Cisco has more end-to-endness)

Someone asked about Cisco differentiating, and cisco says no one else has the "three pillars of the cloud -- Cloud Applications and Services, the Unified Data Center, and the Cloud Intelligent Network.  (So, Cisco has higher acronym potential.) (More seriously - cisco being a provider of broad enterprise equipment might help them here.)

paolo.franzoi 12/5/2012 | 4:47:11 PM
re: Cisco Opens Up the CloudVerse


Forget "To The Cloud" for a moment.  Ask the question this way....Why is Cisco not a VoIP carrier?  They make enough VoIP equipment and could host the stuff pretty easily.

The setup of a service provider versus a technology provider is really different from a company setup.  There is a LOT of blurring around hosted web applications and it gets confusing.  We face it all the time (as a small time hosted web application provider).



rboothby 12/5/2012 | 4:46:55 PM
re: Cisco Opens Up the CloudVerse

People are spending a lot of money running their apps on the public cloud.

The dirty secret is that most service providers are not making decent profits.  Google "Forbes: Amazon Kills It In Cloud Computing But It Won't Budge The Stock Price".

Forbes reported "Amazon’s EBITDA margin from its Web services, including cloud computing and cloud storage service offerings, has declined from an estimated 6% in 2005 to just over 4% in 2010. We expect a further decline in the coming years due to increasing competition from more established players like Google, Microsoft and Salesforce.com in cloud-based offerings."

Cisco's focus on "end-to-end" doesn't solve the low profit margin problem.   The reason is that they are still using centralized storage and machine virtualization.

High profit margins in the 30% to 40% range are only possible when using operating system virtualization with an integrated enterprise file system such as ZFS using local disk.

When Telecoms learn that they can deliver a public cloud and still make a high margin, they are always willing to make the change.

That's why small companies like Joyent are already winning business with the biggest telecoms in the world.

High profit margins trump all.

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