Jan 23, 2015
At this year’s Cisco C-scape EMEAR analyst event, the vendor downplayed its hardware product launches, focusing instead on its rapidly evolving business credentials. Cisco, with its oft-repeated message of massive Internet traffic growth, talked this time about business outcomes, and delivering all the elements – hardware, software, and professional services — to make that happen. Corporate execs didn’t go as far as adopting risk-reward contracting, but clearly that is what the vendor, with its strong ecosystem of partners, wants to achieve. This has led Cisco to confront the much-vaunted infrastructure customer focus on SDN/NFV architectures, and the widely-used public cloud service model.
The drive to provide more standardized hardware on which to build software solutions that are cheaper and more adaptable to change and expansion has inherent limitations. If you are a service or infrastructure provider shifting the business focus away from optimizing the customer experience towards simple cost saving, you risk losing that customer base. Providers must realize that they cannot rely on customers to accept slower, but standards-based infrastructure developments. Five years into cloud services, the industry has still not managed to define simple standards for data on-boarding to cloud environments or for data portability and interoperability between cloud providers using different platforms.
Providers must realize that they cannot rely on customers to accept slower, but standards-based infrastructure developments.
Revenue statements from public cloud providers over the past two years have not made for pleasant reading for investors: capex requirements continue to go up, while service prices continue to decline. Only the public cloud giants like Google, Amazon and Microsoft that cross-subsidize service and complement them with paid-for services can claim to be profitable. And as these services are accessed via the Internet, net neutrality legislation will continue to prevent infrastructure providers from making extra revenue by offering tiered services.
On the enterprise customer side it’s not a pretty picture either, as many studies have shown that enterprises are, to a very large degree, unaware of their employees’ use of ‘shadow cloud’ services like Dropbox and Skype. That puts a big hole in company GRC (governance, risk and compliance) strategies.
Cisco launched its end-to-end, ‘open’ Intercloud strategy in March 2014 to better support the escalating traffic flows and the emerging Internet of Things (IoT), as well as the expanded Cisco concept of the Internet of Everything (IOE). This is a hybrid cloud model, helping the 300+ customers build private clouds, and then integrating them with global managed cloud services. That is not an offering that Cisco can lift and support on its own – for that, the vendor relies on its 45 partners (resellers, system integrators, carriers, and vertical industry specialists) covering 50 countries.
The Intercloud is underpinned by Cisco IOS NetFlow providing a key set of services for IP applications, including network traffic accounting, usage-based network billing, network planning, security, Denial-of-Service monitoring capabilities, data portability, and network monitoring. Essentially, it’s a global walled garden with some API access points for 3rd party providers. Cisco will claim that the proof is in the pudding – the Intercloud has demonstrated real business value – not only for the customers, but also for the ecosystem partners. The Intercloud structure is aligned with global customer needs in several ways – notably with distributed querying to ensure data sovereignty (data does not leave the jurisdiction, it is stored in).
Focusing on building a global hybrid Intercloud service is well-suited to Cisco’s ecosystem channel partners, who can sell service-differentiated access and cloud performance, and sidestep the whole net neutrality debate by providing access over dedicated LAN/WAN networks. Arguably, it is more open than competing global cloud services from the global telcos like Orange, Verizon, and AT&T, and service integrators like Fujitsu, IBM. and ATOS Canopy; however, Cisco also still has fences to mend on the security front, where the Snowden disclosures included man-in-the-middle US intelligence operatives inserting hardware modifications into Cisco kit before shipping on to non-US customers. Intercloud may give customers the ability to monitor compliance, but that is not enough to ensure the security of their corporate data flows.