Cisco touts Intercloud as partner opportunity

Rob Lloyd, Cisco president of sales and development

, president of sales and development

LAS VEGAS – On the eve of its annual Partner Summit here, Cisco Systems threw a major curveball, reversing its long-held stance that it would not itself stand up clouds in announcing plans to champion and build “the world’s largest ,” a vision that will see it working with many of its partners to create a network of enterprise-grade clouds.

In a press conference explaining the strategy here, Cisco president of development and sales Rob Lloyd called the Intercloud move the second phase of the company’s strategy, in which Cisco will seek to be “the number one company in the hybrid .”

“It will be a distributed network. We are not building a commodity ecosystem, we are building an ecosystem to deliver complex, secure architecture with near infinite scalability,” Lloyd said.

The company will be basing its cloud infrastructure on , and envisions a network of clouds that share common characteristics, including management and security stacks and the ability to move any workload to any part of any Intercloud member clouds. The company will go to market in a number of ways with Intercloud – there will be Cisco-branded services sold direct, there will be Cisco-branded services sold through resellers, there will be partner-branded services white labeled from Cisco, and there will be co-branded services. While Cisco will not itself stand up clouds in all geographies, and will work with partners to provide Intercloud connectivity in many markets, it appears the networking vendor will retain responsibility for interconnectivity, security, and some other services across all member clouds.

“We will design and operate our own cloud, together with the capabilities of our partners,” Lloyd said.

Nick Earle, the company’s newly-minted senior vice president of cloud sales and go to market, said there were plans to include three types of partners into the Intercloud market and the related : cloud resellers, cloud providers, and cloud builders. He said the company deliberately chose to launch the Intercloud vision at Partner Summit because it sees it as a major opportunity and new direction for the company’s channel.

“Our biggest asset is our ecosystem of 65,000 partners, all of whom can play in this model,” Earle said. “We’re going to bring this to market with 65,000 companies behind it, one of which is Cisco.”

While both Lloyd and Earle suggested that details of how different types of partners will be able to monetize Cisco Cloud Services will not be discussed publicly until the company’s Cisco Live event in San Francisco in May, Earle said the intention was to maximize the opportunities for professional and consulting services, which make up some 70 per cent of Cisco partner profitability across the business.

The company introduced Australian as the first company to sign up to be an Intercloud cloud provider, but Canada was also well represented in the Intercloud ranks. Among partners who are either committed to delivering Cisco Cloud Services or supporting the idea are telco Allstream and solution provider . Other organizations – distributor and solution provider among them – with Canadian operations are also on board for Intercloud.

While Lloyd and Earle stressed that the company’s goal was not to build a “me too” to , Windows Azure, and other giant and commodity public clouds, Lloyd said the company was “very open” to the ability for Intercloud customers to connect with and use those services for parts of their workloads where the requirements for security and performance are less stringent. Lloyd indicated there was interest from at least one major provider in hooking up to Cisco Cloud Services.

“This is not an AWS lookalike. That’s a low-margin business where the margins are getting worse, and is bad for partners. This is designed to be an app platform, and specifically an enabler for the ,” Earle said.

But Lloyd added that while Cisco will build “a highly value-added environment,” that there “is a place in the enterprise environment for those kinds of large public clouds, including the ability to move workloads into those large public clouds.”

With Cisco publicly announcing that it will sell Cisco Cloud Services direct in some circumstances, it would seem there is potential for channel conflict in the announcement, but Earle downplayed the potential. Earle comes to the role from the company’s services business, where Cisco has long offered a “Cisco choice” model that includes the ability for global named accounts to buy Smartnet services direct from the networking vendor should they so choose. Still, Earle said, “the mast majority of those services are acquired through partners.”

“We believe the vast majority of [Cisco Cloud Services] sales will be by partners,” Earle said. “This is not a covert direct strategy; it’s a partner enablement play for 65,000 partners.”

Further details of the Intercloud vision, including additional major service provider partners worldwide, and partner profitability plans, are slated to be announced at the company’s Cisco Live event in San Francisco in May.

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