The week after Enterprise Connect, at Cisco’s worldwide Partner Summit conference, Cisco announced Intercloud.
Cisco will invest $1 B in the next two years to build its expanded cloud business, and we expect the incremental capabilities and investments from our partners to expand the true investment figure even further.
We’ll offer an expanded suite of Cisco Cloud Services from a global network of Cisco and partner data centers.
Our cloud will be the world’s first truly open, hybrid cloud. The Cisco Intercloud will be built upon industry-leading Cisco cloud technologies and leverage OpenStack for its open standards-based global infrastructure. We plan to support any workload, on any hypervisor and interoperate with any cloud.
I think I like this, but admittedly I am not 100 percent certain what it is. I’m not the only one confused. I’ve reached out to several analysts and Cisco partners and they seem confused too. The confusion centers around two points: What exactly is Cisco describing, and is it something much more than what Cisco is describing. First, what are they describing:
Intercloud, as the name implies, is a multiple clouds interconnected. This includes multiple public cloud services, private cloud services, and support for hybrid cloud-prem solutions. Cisco calls the buckets Sustained Workloads (private clouds) and Variable Workloads (public clouds), and believes the best solution involves both. Creating one solution out of multiple clouds is the opportunity that Intercloud intends to fix. The magic of the Intercloud is new Cisco hardware and software at partner providers that manage the Intercloud relationships. This is accomplished through Application Enablement APIs for identity, presence, video, and mobility. Additionally, Cisco is embracing OpenStack. The word that comes to mind when I hear Intercloud is “federation,” but it’s a word that Cisco refuses to use when describing Intercloud.
It’s big because inter-connecting cloud services can be tricky. For example, a multi-national corporation may want a US HCS provider for the US, an Australian HCS provider for down-under, and utilize it’s own on-prem gear in other regions – yet the desire to make it all act as a single, virtual system. As far as I can tell, it’s something that Intercloud will enable. It’s also big because it supports OpenStack – this, in theory, should simplify control and management functions. However, it is also small because it’s really all about Interconnecting Cisco solutions, and doing so through more Cisco gear at each provider. But honestly, that’s ok (as a starting point).
Now, part 2 – Is this what it seems?
Cisco is a complex company because it plays in so many markets including DRaaS, ACS, DaaS, TPaaS, etc. I know UC and UCaaS, and I’m bullish on UCaaS, and there may be something bigger going on here than what appears. Cisco’s UCaaS (HCS) story is really similar to its core UC business. Instead of selling apps and gear to enterprises, HCS repackages them as apps and gear for Service Providers. That was a smart, low-hanging opportunity. Cisco’s shift to the cloud hasn’t shifted its business model – significantly. During last quarter’s results call (Q2-14). CEO John Chambers said:
Cisco’s cloud networking platform, Meraki, continues to perform very well growing over 100% year-over-year and more than doubling customers from 4,300 one quarter ago to 9,600 in this quarter…The WebEx conferencing business had a very strong quarter up 21%…It is worth noting that our goal to move more Cisco’s revenue to recurring is taking place today in our collaboration businesses…Over time, you will see us introduce new consumption models in other parts of our business that align with how customers want to buy IT today which will also help us drive better visibility going forward.
Cisco clearly intends to move toward recurring services revenue. Intercloud is part of that transition. Intercloud isn’t just about public and private clouds – it’s about public, private, Cisco powered, and Cisco Cloud Services.
Cisco Powered is already established with provider branded offers of Cisco solutions such as HCS, IaaS, PaaS, etc. Cisco Cloud Services include WebEx, Meraki, Analytics, HANA aaS, vDesktop aaS, etc. Intercloud formalizes and expands Cisco’s ability to be a provider itself. There is nothing in the Intercloud announcements that state Interncloud changes what Cisco offers as a service – yet. However, I have felt for some time that Cisco needs to be hosting UCaaS. I feel the model is beginning to change to favor UCaaS providers in control of their own technology. Thinking Phones, 8×8, ShoreTel Sky, Mitel Mi-Collab, NEC 3C, even BroadCloud – are all providers that own and control their hosted platforms. Beyond UCaaS, all the top cloud providers own and control their own technology – Amazon, Google, Facebook, even Netflix.
The reason ownership is important, is because of analytics and customer interaction. Google knows exactly which features get used the most in Gmail, and it isn’t through customer surveys. Cisco has time here because UCaaS analytics are still in their infancy. Cisco will likely build out Intercloud leveraging partner solutions. The wholesale market will increase, and eventually services such as HCS will transition into the Cisco Cloud Service portion of Intercloud. Personally, I think this is inevitable, but still several years away. In the meantime, the UCaaS go to market continues to be providers with HCS.
I write this because I’ve been waiting and watching for signs from Cisco regarding shifting more to directly hosting UC.
Intercloud makes a lot of sense – anything cloud makes a lot of sense. Cisco will leverage its huge provider base into a federated cloud exchange. By doing so, it will create value for its partners, for itself, and concurrently build its own presence as a service provider.
The initial Cisco Cloud Services earmarked for Intercloud, according to the press release lists the following:
- PaaS / IaaS – virtual compute, storage, and networking with world-class economics
- Cisco Cloud Services powered by SAP HANA – the popular in-memory platform optimized for Cisco Unified Compute System (UCS)
- Collaboration — Cisco WebEx® suite of collaboration applications and services
- Security – Cisco Scansafe managed threat defense
- Network Infrastructure Management – Cisco Meraki (cloud managed networks)
- Virtual Desktop-as-a-Service – desktop virtualization solutions from Cisco, VMware and Citrix
- Partner-branded Cisco Hosted Collaboration Services
- Cisco Videoscape Cloud DVR – scalable cloud resources for content ingest, recording and playout
- Cisco Virtualized Mobile Internet – a premium data delivery service
- Virtualized Managed Services – cloud-based virtual services for faster provisioning and service agility (e.g., vFW, vPE and vCPE)
- Remote Management Services (RMS) – remote management of IT operations enabled by Cisco Smart Services
- Compliance and Configuration Management Services (CMCS) – automated management of Compliance and Configuration ITIL processes
- IT Service Management Services (ServiceGrid) – cloud-based management of the IT Service Management function
- Energy Management Services (Energywise) – automated management of electricity usage for the entire IT network
- Collaboration as a Service (CaaS) – voice and contact center as a service