Cisco Systems announced its big cloud play---technically an "Intercloud" sold by the networking giant and a bevy of partners---and a $1 billion investment to grow the business.
The two-year build-out effort, as outlined on Cisco's site, is a bit formulaic:
Here's the reality behind the moves: Cisco wants to be an IT partner of choice for the enterprise. The problem for Cisco was that it was selling gear to enable cloud computing, but not offering services.
IBM went cloud crazy via acquisitions and has built out its stack. Microsoft has Azure. Oracle is talking a summer cloud fiesta. Hewlett-Packard has its cloud stack. From a different angle, SAP talks about the cloud with a heavy dose of HANA non-stop. Verizon has a low-cost cloud as does AT&T. And every vendor is chasing Amazon Web Services, which cuts prices at a rapid clip. Toss in Rackspace and you have a crowded cloud.
Telstra gets global cloud scale with Cisco | Cisco's Q2 mixed as revenue slides, EPS exceeds target | Cisco aims to be cloud connector in hybrid data centers | Cisco launches ACI, a software analog to UCS in data centers | Cisco launches Internet of things division, eyes standardization
Cisco had to play the cloud game and wrap its software, security and gear around a hybrid approach. And offer cloud services itself. Cisco was at a disadvantage without an as-a-service story.
Cantor Fitzgerald analyst Brian White said:
In our view, Cisco's IT competitors such as Hewlett-Packard, IBM, VMware and others have aggressively rolled out their own cloud services, placing Cisco at a disadvantage in supporting the needs of its customers.
It's unclear what this cloud play will do to gross margins at Cisco. Cisco will likely have to build out a complete stack with OpenStack just like everyone else.
One unique spin is that Cisco has a bevy of partners helping it sell its cloud services. Australian telco Telstra is on board, as is Wipro and a bevy of service providers.
Here's a look at Cisco's cloud lineup on deck:
Cisco's portfolio has a decidedly networking spin to it and that move isn't all that surprising. The big question is whether Cisco's cloud efforts ring true to IT buyers or just sound me too.