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Cisco Aims To Disrupt Tech Industry With Public Cloud Offensive

Cisco rolled out a massive public cloud offensive that it says will give Cisco partners greater opportunity and richer profitability models than they can get selling Amazon Web Services or Hewlett-Packard public cloud.

Cisco Systems Monday rolled out a massive public cloud offensive that the networking giant said will return it to its roots as an IT market disrupter and offer partners greater opportunity and richer profitability models than they can get selling Amazon Web Services or Hewlett-Packard public cloud.

"We've gone through a period where perhaps we weren’t leading the disruption, and it felt like we were being disrupted," said Nick Earle, senior vice president, cloud sales and go to market at Cisco. "And I think [with this announcement] people are saying we're back. We're back doing what Cisco always did which is to take the lead and to disrupt -- and it just feels great."

Cisco's new cloud strategy, unveiled at Cisco Partner Summit 2014 in Las Vegas, involves a mix of public, private and hybrid clouds hosted within a network of Cisco and partner-owned data centers built on end-to-end Cisco gear around the globe. Cisco will be offering cloud services direct, and also through a network of cloud services partners. Out of the gate, Cisco cloud services partners include Telstra, Ingram Micro, Logicalis, European cloud company Canopy, Canadian service provider Allstream, and data center and IT solutions provider OnX Managed Services.

[Related: 10 Reasons Cisco's Public Cloud Is Set To Shake Up The Market ]

Earle said Cisco partners have been clamoring for Cisco to get into the public cloud space. "Partners have been saying to us, 'Cisco, when are you going to do this because I'm having to offer public cloud, and today you are telling me to go to AWS or go to Google or whatever. Give me some options,'" he said.

Michael Strople, president of Allstream, one of the initial Cisco cloud services partners, said he has noticed Cisco's cloud strategy "bubbling to the surface" for a while now, and that it's great to finally see it fully come to light.

"The word 'inflection point' is probably the right one. Maybe 10 or 15 years ago you thought of Cisco as a box supplier, and they probably measured themselves by units shipped," said Strople. "But today, they are a very different company for us. We do still buy boxes from Cisco, but a lot more of the business we do with Cisco isn't around boxes, but around solutions."

Earle said solution providers will play a major role in reselling Cisco cloud services, whether they purchase them through service provider partners or Cisco directly. There will also be white-label opportunities, allowing partners to rebrand many of the Cisco cloud services as their own, he said.

"Our culture is partner-centric," Earle told CRN. "We are not announcing a Microsoft strategy where we do it all or a Google or Amazon strategy where we do it all."

Earle said Cisco intends to bring all of its partner might and muscle to the cloud game, including partner rebates, channel enablement programs, co-marketing funds and certifications. "We are going to bring the full monty, the full power of the Cisco channel machine to this world," he said.

Earle declined to give specifics around how partners will be incented and rewarded through Cisco programs such as VIP when selling public cloud, but said more details will come. He did say, though, that the profit potential for Cisco partners will be significant.

"We will provide versions of our existing partner programs -- both from the product point of view and the services point of view, because in cloud it's not just one or the other -- that will drive partner profitability and we believe industry-leading partner profitability in regard to cloud," Earle said.

"We are not announcing a me-too AWS me-too strategy," Earle continued. "Frankly, we don’t think that's great for channel partners, we don’t think it was designed for channel partners, and we think channel partners want a choice."

NEXT: Taking Aim At HP


It's also hard not to see Cisco's public cloud announcement as a throw-down against HP, given that it comes on the opening day of HP's partner conference, also in Las Vegas. Earle, a former 17-year HP exec, claimed HP doesn't have the core networking capability, service provider partnerships, or channel profitability and loyalty that Cisco brings to the cloud game.

"This is all about the network. And HP is not the network. I can see 50 million [Cisco] boxes out there. I can see an install base of $180 billion in equipment that is out there, that still has lights blinking on them. HP doesn't have that," Earle said.

Cisco argues that what sets its cloud strategy apart -- and what will help differentiate Cisco cloud partners -- is the fact that customers can freely move workloads between different cloud environments, but maintain all associated network and security policies for those workloads, he said. Cisco public cloud will be based on OpenStack, and will leverage components of Cisco's Application-Centric Infrastructure (ACI) to optimize application performance. It's also aimed at accelerating the deployment of new applications for the Internet of Things, an emerging trend Cisco said represents a massive $19 trillion opportunity.

Cisco's cloud services suite will include new Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) offerings, in addition to existing services, such as its Meraki network infrastructure management and Hosted Collaboration Services (HCS).

In addition, Cisco will offer SAP HANA-as-a-Service, Microsoft Suite-as-a-Service, and Virtual Desktop-as-Service.

Earle could not confirm exact availability or pricing details for Cisco IaaS, PaaS and other new cloud services.

To support its cloud services push, Cisco launched a new cloud sales and go-to-market unit to be headed up by Earle, who previously served as senior vice president of Cisco's Worldwide Services Operations. The unit will reside within Cisco's broader services organization, with Earle reporting into Senior Vice President, Cisco Services Edzard Overbeek.

The new cloud unit will also be led by Gee Rittenhouse, former president of Bell Labs, the research and development subsidiary of Alcatel-Lucent, and Faiyaz Shahpurwala, senior vice president, Cloud Infrastructure and Managed Services at Cisco.

Earle declined to say how large Cisco's new cloud division will be, but said he will have more details to share within the next month. None of the channel account managers or other resources from Cisco's channel organization will be moved over to the new unit, he said.

Earle did stress, though, that while the details of the unit are still in the works, the atmosphere within Cisco is definitely one of excitement.

"We've been looking at this [market] for a while and we've decided to move. And, to me, people have said, 'Look at the speed we are moving right now.’ We are making decisions, we are moving, we are reorganizing, we are going live in front of our partners,'" Earle said. "Cisco is moving at a speed that many people internally are saying, ’This is great. This is what we wanted. This is the old Cisco. We are back."

PUBLISHED MARCH 24, 2014

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