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Cisco Makes Big OpenStack Splash With Piston Cloud Acquisition

Cisco unveiled plans on Tuesday to acquire OpenStack specialist Piston Cloud to boost the networking giant's ambitious Intercloud strategy.

Cisco is continuing its software acquisition tear by unveiling plans on Tuesday to buy OpenStack specialist Piston Cloud Computing to accelerate the networking giant's ambitious Intercloud strategy, which partners said is starting to gain traction.

The San Francisco-based cloud startup was founded in 2011 by former NASA developers focused on building OpenStack solutions, and has since expanded its software offerings. The financial terms of the deal were not disclosed.

"They're really starting to put a lot of muscle behind their OpenStack offerings," said Ethan Simmons, vice president, East, at Lumenate, a Marlborough, Mass.-based solution provider and Cisco partner. "More traditional Cisco partners never really played in this OpenStack ecosystem, so these acquisitions are there to help accelerate the partners' ability to play in that open source marketplace where traditionally they haven't been. As a Cisco partner, it makes our migration to having those conversations with customers much easier."

[Related: 8 Challenges For Cisco's Next CEO Chuck Robbins]

With Piston's OpenStack expertise and distributed systems engineering, the San Jose, Calif.-based networking giant plans to enhance its capabilities around cloud automation, availability and scale to complement its Intercloud strategy and OpenStack Private Cloud, according to Hilton Romanski, senior vice president and head of business development at Cisco, in a blog post on Tuesday.

"Today, Cisco is taking another important step towards realizing our ambitious Intercloud vision," said Romanski. "Piston’s deep knowledge of distributed systems and automated deployment will help further enhance our delivery capabilities for customers and partners."

Cisco launched Intercloud in 2014 with the goal of creating a global network of connected public, private and hybrid clouds. During Cisco Partner Summit 2015 in April, partners were given a road map of how to create professional cloud service practices by unveiling seven new cloud services for certified partners, as well as a revamped Intercloud Marketplace -- a partner-centric global storefront for application consumption that brings customers and the channel together.

Partners said Cisco's bullish software acquisition and implementation strategy is helping the channel win sales as the market demand for cloud increases. They pointed at the company's purchase of Pasadena, Calif.-based Metacloud, a provider of OpenStack-based private clouds, and its implementation in the new OpenStack-based managed services bundle as a "perfect" example of how quickly Cisco is moving on the cloud front.

Cisco also unveiled plans in May to acquire the privately held Menlo Park, Calif.-based company Tropo, a cloud API platform provider.

"They're saying, 'Hey, I want to be a leader and I can't rest on laurels' -- so I think continued investment is the order of the day in cloud for Cisco," said Kent MacDonald, vice president of converged infrastructure and network services at Long View Systems, a Calgary, Alberta-based solution provider and Cisco Gold partner. "OpenStack is certainly something Cisco's continually going to commit and expand, and when Cisco brings these offerings to market I think it creates a validation for the customers that it's real, and it's going to be supported and it's going to be in the Cisco model."

Long View is currently investing in Cisco's Intercloud fabric, implementing it into its own infrastructure and said the networking giant is rewarding such partners by providing more cloud offerings through acquisitions.


Simmons said Intercloud is starting to gain momentum as solution providers begin to understand the sales opportunities as Cisco pushes partners to build out software practices.

"The clarity of the story and more completeness of the vision is getting more talked about now. There's still more work to do, but it's finally starting to get to the point where people are getting their head around how they can actually make money with this solution," said Simmons.

Simmons said if partners want to stay relevant with customers, they need to focus on selling applications that drive business outcomes that will increase demand for cloud services and infrastructure.

"If you're unable to have those application conversations, you're not going to be relevant to your customers -- that's the message Cisco has made pretty clear to the partner community," he said. "It's forcing partners to have a different conversation with customers, and I think that's driving more traction around a software sales model."

PUBLISHED JUNE 3, 2015

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