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Cisco's cloud networking play targets hybrid cloud shops

Cisco's cloud networking strategy continues to focus on its strengths with a new bundled suite for automation and a shift in licensing.

Cisco has struggled to make inroads in public or private cloud, so the vendor is banking on its networking experience to play a key role in enterprises' hybrid cloud deployments.

The San Jose, Calif.-based company's cloud strategy relies on shifting its networking focus from hardware to software. Cisco made a splashy roll out of its cloud intentions last year that hasn’t translated into much yet, but its latest efforts around a unified cloud networking platform and subscription models could change that -- at least with its existing customers.

"They're going out with their strength, which is connectivity between all these clouds rather than differentiating with one cloud itself," said Dave Bartoletti, principal analyst with Forrester Research, Inc., based in Cambridge, Mass. "Cisco wants to be the glue that connects all your clouds together and not battle it out with commodity vendors for cloud servers."

Cisco wants to be the glue that connects all your clouds together and not battle it out with commodity vendors for cloud servers.
Dave Bartolettiprincipal analyst, Forrester Research, Inc.

The company spent 2014 laying out its vision, but 2015 should be the year it starts to execute on that plan and build out its feature set. Early success could come with service providers, he added.

The Cisco ONE Enterprise Cloud Suite is the latest offering within its larger Intercloud ecosystem that allows customers to connect with workloads in large public cloud vendors such as Amazon and Microsoft. That ecosystem also incorporates a variety of other cloud vendors, including Telstra, Dimension Data and SunGard. The suite offers a single portal for various management tools and the Cisco private cloud targeted at CIOs struggling with automation around hybrid deployments.

Cisco has added a raft of management platforms, including Prime Service Catalog, UCS Director and Intercloud Fabric, either through acquisitions, organic growth or by leveraging OpenStack, said Mary Johnston Turner, research vice president for IDC, a market research firm based in Framingham, Mass. Cisco is now bundling it all together to provide a turn-key way to get private cloud infrastructure and middleware going.

"For organizations that want something that will deliver quickly out of the box, this is a big step forward in terms of what Cisco can bring to the market," Turner said.

Cisco is targeting its Unified Computing System (UCS) community, offering tight integration and technology to optimize the ecosystem, Turner said. It's also a strategic move to maintain relationships with enterprise customers via a software layer rather than a hardware layer.

"People are going to build cloud environments, but Cisco wants to clearly be the strategic software layer in those private clouds," Turner said. "They don't want UCS-based platforms and software going somewhere else."

However, price will also play a role in Cisco's ability to succeed in the price-sensitive cloud market. Cisco did not respond to a request for details on the cost of its cloud services or licensing.

Cloud struggles so far

Cisco's management platform has been virtually nonexistent in the cloud market, said David Linthicum, senior vice president for Cloud Technology Partners, Inc., a Boston-based consulting firm.

"As far as them being a player in the public or private cloud market, we're just not seeing them in the enterprise to the extent that other large players are or even the second-tier providers, such as HP or IBM," Linthicum said.

Last year's OpenStack moves were "too little, too late, and way too confusing," because of all the unconnected pieces, he said. Cisco has lacked the vision and strategy to let potential customers know where it's taking its cloud computing products, Linthicum said.

It probably makes the most sense for Cisco to make a play around networking optimization and security, while also trying to get ahead of the next wave of infrastructure technologies, Linthicum said.

"Cisco views the hybrid challenge as a networking challenge and it is in a lot of ways," Forrester's Bartoletti said. "It makes sense if they can make the network disappear and boundaries between all these different clouds break down."

The service provider strategy is similar to VMware's early cloud model -- a series of use-case partnerships that move Cisco's technology to the cloud, Bartoletti said. It's fitting, because Cisco had all these different pieces that were too complicated and hard for mainstream enterprises to access.

It should be noted, however, that VMware ultimately shifted gears and offered its own public cloud service, Bartoletti said. It's unlikely to happen, but Cisco would benefit from acquiring a public cloud provider because the alternative is continual dependence on partners, he added.

"Cisco is relying on the partner to encourage people to use the Cisco-powered offering," Bartoletti said. "That's one step removed from the buyer."

Licensing shift

Another important shift for Cisco involves a broader move away from perpetual licenses to subscription-based licenses. With the advent of cloud, companies no longer want to rely on the old licensing system, so it's smart to decouple the licenses from specific hardware and make it portable across platforms, analysts said.

"They're thinking a lot about what it means to be a software ISV as opposed to a software integrator," Turner said. "That's a really important part of a bigger push to make it easier for customers to consume software."

Trevor Jones is the news writer for SearchCloudComputing. You can reach him at [email protected].

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