Cisco cuddles all clouds but one
Leaves Amazonian play to the Amazons
Well, it's the end of June, and Cisco Systems' "California" Unified Computing System blade boxes and related networking is supposed to be shipping. In a webcast today with analysts, partners, and press that's part of a two-day analyst event called Cisco Live, representatives ignored two questions from El Reg about whether or not the California boxes were still shipping, but they did want to talk about cloud computing and how California, WebEx, and networking in general fit into the company's cloud strategy.
Padmasree Warrior, Cisco's chief technology officer, gave the standard speech we hear nowadays any time an IT executive opens their mouth. They talk about cloud computing and how this "changes everything," or sometimes, they even say that cloud computing fulfills decades of promises for the kind of heterogeneous, distributed, n-tier, flexible computing that people have been dreaming about since the telephone company was the boogie man - not Microsoft or Google.
Anyway, Cisco is interested in cloud computing, and obviously, its Unified Fabric for networks and storage, its blade and rack servers, and its virtualized servers and networks will play a part - and perhaps a big part - in cloud computing. We all get that.
The important newsflash today is that Cisco does not plan to throw its hat in the ring and build its own compute or storage clouds and compete against the likes of Amazon, IBM, and
Sun Microsystems Oracle, who are building their own clouds just like every telecom company, service provider, and Internet hosting firm seems to be doing or will soon do. The IT world is not just going to be cloudy like Earth. It is going to be dense with clouds like Venus, or at the very least, swirling with them like Jupiter.
And the reason is simple: People think they can make money by selling something called a cloud. Cisco cited data from IDC from October last year that reckons that cloud computing in its myriad forms accounted for $16bn in sales in 2008 and will grow to $42bn by 2012, a compound annual growth rate that is running at 27 per cent, more than five times the expected growth rate for IT as a whole. Of course, with the economy still on the fritz, if IDC did its cloud forecast again today, it might show IT hardware and software sales slackening and cloud computing holding steady or growing as companies try to save money. Adverse economic conditions tend to force phase changes in IT technology, as you well know.
Clouds mean a lot of different things to a lot of different people. Warrior explained that Cisco sees cloud computing as having four tiers. The lower tier is an IT foundation, including servers, storage, and networking, and that the whole point of UCS was to be a player for infrastructure. In this area, Cisco plans to compete with IBM and Hewlett-Packard as well as partner with EMC, VMware, Microsoft, and others.
The next tier up is what Warrior referred to as infrastructure as a service, which means selling cloud computing capacity like Amazon does with its EC2 compute utility and S3 and EBS storage utilities. Warrior showed a slide that pegged Amazon, AT&T, BT, HP, IBM,
Sun Microsystems Oracle, Savvis, Telstra, and Terremark as the key suppliers so far. And Cisco will not be one of them, even though it must be tempting to build a cloud at cost and sell capacity on it.
But that means competing with the key customers who will build clouds - and quite possibly choose the California boxes to do so, given the economic and operational advantages that Cisco claims for them. And that is a no-no, at least until after all the money has been made selling UCS products to the telcos and hosting providers.
"We do not have plans to become an IT as a service provider," Warrior stated emphatically. Later in her presentation, during a question and answer session, Warrior explained that selling raw capacity on a compute cloud "is counter to our business model" but was quick to add that Cisco absolutely would be building its own internal clouds (and presumably based on California blades and unified fabrics) to run applications that it provides as a service to customers.
Now, taking a step up in the abstraction layer of Cisco's cloud computing model is something Warrior called platform as a service, and this is really providing cloud infrastructure with software development frameworks that allow companies to deploy applications. This is more like Google App Engine, Windows Azure, and certain parts of Amazon Web Services, and in Cisco's case, the application framework is WebEx Connect, which is evolving from the online Web meeting platform of the early 2000s into a collaboration framework with APIs for integrating other applications into the Web conferencing, chat, and collaboration tools that can be mashed up as IT organizations see fit.
According to Doug Dennerline, senior vice president of Cisco's Software Collaboration Group, which runs the WebEx conferencing service, the next version of WebEx Connect (dubbed "C6" in code-name speak) is due at the end of the summer, and it will integrate the enterprise instant messaging that Cisco got through its acquistion  last September of Jabber. Cisco also has plans to weave its Call Manager voice over IP offering into the WebEx Connect framework, and Dennerline said that other service providers are already trying to figure out how to add Call Manager to their own cloud services.
The top and final tier of the cloudy world that Cisco is helping us all build is software as a service, and here, Cisco absolutely has plans to be a player alongside Microsoft, Salesforce.com, and Google. Up here, WebEx will be the brand. WebEx Mail, a mail and calendaring service based upon the PostPath acquisition from last summer, will be added to the WebEx mix and delivered as a service atop Cisco's own cloud infrastructure. Dennerline said that WebEx is hosting 220,000 meetings per day and over 4 billion meeting minutes per month and that this was supported from nine data centers around the globe. He added that there are over 450 million knowledge workers on the planet and that the collaboration software and services space would comprise about $34bn in sales and that "we certainly don't have our fair share yet" of that space. As for how Cisco will get its fair share, it's the same old mantra: build, buy, and partner.
Now, back to clouds. Cisco believes that for its own cloudy applications, it can get its server, storage, and networking costs down thanks to the California boxes and the 30 per cent reduction in capital expenses and 20 per cent reduction in operational expenses that the setup allows thanks to converged and virtualized networks and integrated server and network management. So that gives Cisco an edge over other companies that might want to compete with WebEx, in theory. And Dennerline bragged that when it buys storage from EMC, it can get storage at or near the same price as Google gets with its cheapskate homegrown servers. (Tough to prove that one, though). "There is more work to be done with UCS to make it economically competitive," Dennerline added, referring to a comparison with Google infrastructure, not with other commercial blade servers.
For now, Cisco believes that companies will build their own internal clouds, want to put some work on public clouds, and possibly set up semi-private clouds. It also believes that five or six years from now, these will all be linked into something Warrior referred to as the "Inter-cloud."
And at that moment, the ears of former Alaskan senator Ted Stevens pricked up. ®