Cisco Storms Into The Cloud Market

CloudVerse, a framework that combines unified data center, cloud intelligent networks and cloud applications, is Cisco's cloud coming-out party, say company officials. Code-named Hurricane, CloudVerse is one of the company's top five priorities. Cisco sees hundreds if not thousands of cloud providers--what it calls "the world of many clouds"--and it wants to ensure it gets more than its fair share of the cloud infrastructure market.

The math is simple, says the networking giant: Global cloud computing traffic will grow 12-fold from 130 exabytes to reach a total of 1.6 zettabytes annually by 2015, a 66% compound annual growth rate (CAGR). According to Cisco's inaugural Global Cloud Index (2010 to 2015), released in late November, cloud is the fastest-growing component of data center traffic, which itself will grow four-fold at a 33% CAGR during this period. Today, cloud is estimated to be 11% of data center traffic, growing to more than 33% of the total by 2015, at which time 76% of data center traffic will remain within the data center itself as workloads migrate between various virtual machines and background tasks, 17% leaves the data center to be delivered to the end user, and an additional 7% is generated between data centers through activities such as cloud bursting, data replication and updates.

Cisco says CloudVerse delivers a business-class cloud experience within the cloud, between cloudsand beyond the cloud to the end user, adding that it has already signed up a number of enterprises, service providers and governments, including ACS, Fujitsu, Orange Business Services and Verizon Terremark. The company says more than 70% of leading cloud providers are using Cisco CloudVerse on their journey to the cloud.

The company says the untold story of the cloud is the network, and unfortunately it doesn't occur to people that the network is critical until it fails. Cisco sees its big opportunity to enable customers to build clouds, with tailored solutions for building clouds, a "rich" ecosystem of integrated solutions and innovative cloud services.

Dana Cooperson, VP, network infrastructure, Ovum, likes Cisco's explicit connection between the resources inside the data center and the interconnection resources. "If service providers can use their network assets as a key part of their cloud offer to enterprise customers to create a secure, robust set of cloud services, then the cloud services market will expand and they will gain a healthy share of the private/hybrid cloud services market. I think that Cisco’s go-to market, which includes Cisco certifications, is very interesting and could be a big advantage. The various management bits, including Cisco Unified Management and, specifically, Cisco Intelligent Automation for Cloud and Cisco Network ServicesManager, are comprehensive and intriguing and will make or break the end-to-end nature of the solution."

She remains unclear on how this initiative all comes together and how the bits and pieces of CloudVerse are modularizedso that service providers who want pieces can buy just them and still get benefit. Cooperson adds that it has some overlap with Alcatel-Lucent’s recent CloudBand announcement.

"These two infrastructure vendors are the first to articulate end-to-end cloud enablement strategies for private/hybrid clouds and to tie the data center resources directly to the network resources. This will enable service providers with network assets to make credible the contention that only by controlling the resources both inside and between the data centers--and the link between the customer and the data center--can a true business-class private/hybrid cloud service be offered."

Large service providers like an AT&T or a Verizon won’t necessarily need the full Cisco CloudVerse solution, from cloud enablement and strategy services to manage/optimize services, nor the full application-unified data center-intelligent network product suite, but large operators (for example, Orange) have bought and will at least buy best-in-class bits and pieces, she says. "Smaller service providers are most likely to take advantage of the end-to-end capabilities for cloud business creation that CloudVerse and CloudBand provide."

Zeus Kerravala, principal analyst at ZK Research, thinks CloudVerse represents a new approach by Cisco. "It's not about products or services; it's about management and interoperability, or about scaling the cloud to where it becomes useful."

He also thinks its significant that Cisco is focusing on service providers, who tend not to be very good at leading markets (“They don't do small very well,” he says) but are at scaling them. "By Cisco helping lead this market, it helps them. I think that's where Cisco can lend value to service providers."

Cooperson says telcos have been a bit frustrated that it’s been the IT guys, not them, that have dominated the cloud services markets. Ovum research shows that telecommunications providers are emerging as trusted partners for cloud services. Last year's survey found 37% of enterprise users rated telecommunications providers as credible suppliers for cloud computing, but this year it has increased to 49%. "So they are in a good position to take advantage of cloud-enablement solutions, like CloudVerse and CloudBand, designed specifically for them and their customers."

IDC's Melanie Posey, research VP, web hosting and telecom services, says Cisco is banking on the combination of its cloud assets--automated/orchestrated unified data center and intelligent networking--to make it a preferred partner for service providers and enterprises pursuing public, private and/or hybrid cloud-based IT-as-a-service strategies. The networking piece (and the fact that Cisco is not also a service provider) sets up differentiation between Cisco and HP and IBM.

"The cloud building space is heating up, and Cisco's strength in key cloud domains--data center, networking (WAN and datacenter networking) and applications (its own offerings like Collaboration/UC and those of ecosystem partners)--puts it in a good positions to serve both enterprises and service providers. Given Cisco's long-standing relationships with key national/global service providers, CloudVerse puts Cisco in a good position to evangelize the benefits of the cloud model at service provider scale. On the enterprise side, the combined cloud IT stack/networking message creates differentiation from vendors like HP and IBM that are more deeply entrenched in enterprise data centers."

She likes the emphasis on the need for unified data center and intelligent network to enable cloud services/applications creation, delivery and consumption. "It builds on Cisco's strengths, reasserts the importance of the network in the cloud landscape, connecting end users to clouds and connecting data centers/clouds to each other, and perhaps jump starting large-scale cloud development/deployment in the carrier space--thus expanding the universe of cloud service providers."

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