Cisco Tries to Corral Cloud Networking’s ‘Unmanageable Mess’

A cloud network in which Cisco Systems Inc.CSCO +0.48% is investing $1 billion could help CIOs more easily manage data spread across disparate computer systems, analysts say. They also say the network, which Cisco calls the Intercloud, addresses CIO concerns on meeting local data protection regulations.

Cisco’s idea of bridging cloud systems through technology and relationships with telcos also got a boost with the announcement, Monday, of 30 partners, including British Telecom, Deutsche Telekom and Equinix Inc.EQIX +1.13% The initiative pits the networking giant against Inc.AMZN -0.43%, Google Inc.GOOGL -0.02% and IBM Corp.IBM -0.22%

Intercloud will allow customers to rent computing power — similar to the way AWS,Microsoft and IBM sell cloud to customers, said Carl Brooks, an analyst who covers cloud computing with 451 Research. But while those companies typically build and operate their own data centers. Cisco is largely relying on its network of telcos to house its cloud systems and help run them. “Intercloud is basically a partner and channel strategy for serving up infrastructure as a service,” he said. “They’re basically saying we have a stake in this game, and even though we’re not Amazon, you can’t ignore us,” said Mr. Brooks. However, he added that the full details of Cisco’s Intercloud remain to be seen.

Leaving aside the strategy behind Cisco’s cloud stake, the question from CIOs is to what extent Intercloud can make things easier.

With funding and more partnerships, Cisco’s cloud vision—something it has been talking about for a while — could create a standard way to connect networked computer systems, Andre Kindness, a Forrester Research Inc. analyst who covers networking technologies, tells CIO Journal. Large companies, especially multi-national conglomerates, can rely on dozens of telecommunications carriers, all of which offer their own connectivity systems and protocols, to connect their users, data centers and regional offices together. Adding cloud service providers to that mix creates an “unmanageable mess for any company,” he said. Something like Intercloud, that promises to let CIOs connect to multiple cloud providers and manage them as if they were a single cloud, sounds enticing. “Cisco is saying: ‘Look to us to help you create a consistent hybrid connectivity cloud for you,’” Mr. Kindness said.

Another possible sell for CIOs could be Intercloud’s promise to help international businesses meet local regulations for storing data collected from citizens in local data centers, says Leslie Rosenberg, an IDC analyst who covers IT service providers. Countries have become sensitive to enforcing such data governance in the wake of news of U.S. government spying on cloud software providers. “Governance and compliance, and the ability to have standardization globally is a major concern,” for CIOs, she said.

To help address this concern, the new partnerships include 250 data centers in 50 countries, said Rob Lloyd, Cisco president of development and sales, in a blog post. In a March interview with CIO Journal, Mr. Lloyd said the Intercloud would address demands from governments around the world for cloud infrastructures that protect domestic commercial interests from prying eyes and subpoenas from U.S. and Chinese government agencies. He said a lot of telecommunications carriers “will have mandates to build national clouds.”

Cisco’s Intercloud includes servers, networking gear and software that allow IT departments to shift workloads from their private clouds and data centers to and from public cloud settings running governance rules baked into the cloud operating system. Mr. Lloyd said Cisco is developing an “application-centric infrastructure” that will dictate “how data can and can’t move” and will be based on a new standard called OpenStack.

Intercloud isn’t for every company. BMC Software Inc., which builds software to manage computers, runs and operates its own private cloud comprising 17,000 virtual machines, said Scott Crowder, the company’s CIO. He said that BMC views most of its software development as strategic, and prefers to keep most of this work in-house to protect its intellectual property. “We’re very careful about what we put into the cloud,” Mr. Crowder said. However, he said Cisco’s system could suit startups who lack the requisite expertise to run computer systems, or companies looking to switch from their current cloud vendors.


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