Cisco makes $1B bet on the cloud

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Cisco (Nasdaq: CSCO) is making a bold bet to become a larger player in the burgeoning cloud market with plans to invest $1 billion to build what it calls a global Intercloud--a network of clouds.

Working with service provider and network infrastructure partners such as Allstream and Telstra (ASX: TLS.AX), which will provide data center and other related assets, the vendor said its Cisco Cloud Services is being built to handle the so-called Internet of Everything.

Making these services available through established service provider partners like Allstream and Telstra makes sense. These two service providers will be able to immediately extend their respective cloud portfolios to their customer bases without major capital investments, while Cisco can further its bond with two major service provider brands.  

"Our longstanding relationship with Cisco allows us to offer deeper and broader service capabilities to help our customers manage their critical applications, making the transition to the cloud simpler and more cost effective," said Erez Yarkoni, executive director of Cloud, Global Enterprise and Services at Telstra, in a release.

Other partners include Canopy, Ingram Micro, Logicalis Group, MicroStrategy, OnX Managed Services, SunGard Availability Services and Wipro Ltd.

Cisco Cloud Services will leverage a distributed network and security architecture designed for high-value application workloads, real-time analytics, "near infinite" scalability and full compliance with local data sovereignty laws.

"Companies are looking for different ways to get IT done," said Rob Lloyd, Cisco president of development and sales, in a release. "Everybody is realizing the cloud can be a vehicle for achieving better economics [and] lower cost."

Although Cisco remains one of the dominant vendors in the routing business, its move into the cloud reflects the need to find new business opportunities as more enterprises and even small to medium sized businesses (SMBs) outsource more IT functions to third-party cloud providers.

Cisco's OpenStack-enabled Intercloud has been built to enable businesses and their users to combine and move workloads--including data and applications--across different public or private clouds as needed, while maintaining associated network and security policies. Intercloud will also leverage the vendor's Application Centric Infrastructure (ACI), which it claims will optimize application performance and enhance service delivery times.

Cisco Cloud Services will become part of the Cisco Powered program. It plans to sell these new services through channel partners and directly to end customers.

For more:
- see the release
- WSJ has this article (sub. req.)

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