Cisco introduces billion dollar Intercloud

LAS VEGAS – Cisco Systems is embarking on one of its most ambitious projects in company history. The networking giant announced at its Partner Summit conference a plan to build the world’s largest global Intercloud that will cost approximately $1 billion and will take two years to roll-out.

According to Cisco, an Intercloud is an open network of clouds that will feature APIs for application development and a new line of cloud services for the channel.

Rob Lloyd, president of development and sales for Cisco, said this Intercloud marks the second phase of the company’s strategy to become the No. 1 vendor in hybrid cloud. The Cisco Intercloud will be unique in that it will try to leverage public clouds such as Amazon, Google and the Microsoft Azure cloud.

One of the key points of differentiation for the Intercloud is scalability and full compliance with local data sovereignty laws. Some of the challenges Cisco looks to address with the Intercloud revolves around too many workloads being put on personal credit cards. Nick Earle, Cisco’s senior vice president of cloud sales and go to market said that this behaviour leads to the IT department having no clue on what assets they have, no security for their corporate data, no audit trails, and no compliance.

“The Intercloud unlocks the innovation for hybrid cloud. About 73 per cent of CIOs are interested in hybrid clouds. What’s happening now is that it’s too fragmented. There are too many to choose from and too many workloads are being put on a personal credit card,” Earle said.

While Cisco’s stated investment is at $1 billion Lloyd said that he does not believe a billion dollars will be enough, but expects that number to be multiplied with the help of channel partners.

Lloyd added that 65,000 channel partners have the opportunity to get involved.

“How is this going to work? Think of it as a bag of Lego blocks. A whole bag of ingredients with partners in the cloud market such as ISVs. Also involved will be Cisco-owned apps (Webex and Meraki). We plan to deliver clouds similar to on premise and perpetual licenses. It will include geographic reach to deliver to Australia, Germany, Africa, Asia and country-to-country. This will be in every country in the next few years,” Lloyd said.

One of those ISV partners will be SAP who plans on offering Hana on the Intercloud. Other channel partners who have signed on to the Intercloud are: service providers Telstra, Allstream, distributor Ingram Micro, solution providers/managed services providers Logicalis Group and OnX along with IT consulting and outsourcing player Wipro Ltd.

For the channel, Cisco anticipates solution providers to build whole cloud apps, while designing and operating their own cloud. “If you ask a solution provider today if they can keep up with the scale of cloud speed. The answer is no. They can’t achieve scale by themselves,” Lloyd said.

Cisco’s go to market strategy with the Intercloud will involve a Cisco branded offering, a Cisco branded offering for the reseller channel, a co-branded effort with Cisco and the channel partner and a white label model where the solution provider puts their own brand on it.

The company is also expanding its Cisco Powered program to include Cisco Cloud Services. Cisco does plans to sell these new services such as PaaS and IaaS direct, but Lloyd did say their preferred method is through the channel.

Erez Yarkoni, executive director of cloud for service provider Telstra, said the Intercloud model starts the engagement with customers. “There is gross margin to be made. There is a business there but the final pricing is still to come but we can bring our own value on top of that. The model allows you to build good revenue,” Yarkoni said.

He added that Telstra plans to be aggressive and will be in Alpha mode by May with full production by the end of the year.

Lloyd said his intention with the go-to-market strategy is to include the large cloud vendors in Intercloud. “Let me be clear here; the customer expect this and we are open to this.”

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Paolo Del Nibletto
Paolo Del Nibletto
Former editor of Computer Dealer News, covering Canada's IT channel community.

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