Cisco: Cloud Is A Fundamental Shift In Way IT Is Delivered

Like IBM and a host of partners, customers and competitors, Cisco believes the cloud represents a fundamental shift in how information technology will be delivered. However, there is a difference, said Cisco’s Pat Adamiak, Senior Director, Cloud Solutions Marketing.

“Our strategy is to enable service providers and enterprises,” said the man responsible for the global development of Cisco’s cloud solution portfolio. “We help them build clouds. It’s a different strategy from other major computer players who also try and offer them cloud services.”

According to the second annual Cisco Global Cloud Index (2011-2016), global data center traffic is forecast to grow fourfold by 2016, but cloud traffic, the fastest-growing component of data center traffic, is expected to grow sixfold during this period. Infonetics Research reported that 91% of enterprises interviewed use cloud services today, growing to 100% by the end of 2014, and the leading drivers for deploying cloud services are application performance and management of IT costs.

“There is no doubt, the cloud has come of age,” notes Sam Barnett, directing analyst for data center and cloud at Infonetics Research. “While investments in cloud outsourcing are small in comparison to internal IT/data center spending, they are growing each year, with the number of enterprise organizations turning to cloud technology to manage budgets and transform service delivery increasing significantly in the last two years.”

Last month IDC reported that spending on hosted private cloud (HPC) services – an operational model for deploying computing infrastructure services of many types via a cloud model – will be more than $24 billion in 2016. HPC spending will experience a compound annual growth rate of more than 50% over the 2012-2016 forecast period as companies and IT providers look to cloud in its various forms as a means to transform and make more efficient and scalable the “how” of what they provide to their customers.

Its research counterpart, Gartner, forecast that public cloud services market will grow 18.5% in this year to $131 billion, up from $111 billion in 2012. Infrastructure as a service (IaaS), including cloud compute, storage and print services, continued as the fastest-growing segment of the market, growing 42.4% in 2012 to $6.1 billion and expected to grow 47.3% in 2013 to $9 billion.

Cisco is using the concept of the ‘world of many clouds’ to describe its customer-choice model. Each customer’s journey to cloud is unique, said Adamiak. A company looking to build a private cloud may begin by consolidating, virtualizing, and automating their infrastructure. Others may look to select a virtual private cloud or managed cloud services. Organizations planning to offer commercial cloud services will need to take a different approach to cloud. They will need to focus on envisioning a portfolio, building out the required infrastructure, ascertaining an effective marketing and sales approach for their services and then quickly iterating their approach based on what they learn in market.

He said it is pretty clear that the market is evolving with many flavors of specialized cloud services coming to market, providing a wealth of choice for the enterprise, small and medium business, and public sector markets and a range of opportunities for cloud providers to provide differentiated cloud services. These services may address industry or country/province specific functionality or compliance requirements.

The world of many clouds is creating a huge business opportunity for Service Providers – namely to connect multiple clouds for richer, aggregated services, assured experiences and consistent customer care, said Adamiak. There is a bit of a land rush taking place as telcos and service providers either directly or through acquisition try to stake out their claims to the cloud, said Adamiak. “Cisco is a very strong partner with most of the major telcos around the world.”

Cisco is seeing the emergence of the Cloud Services Brokerage business model – and Cloud Service Brokers (CSBs) – whereby a firm acts as an aggregator of cloud services, a marketplace, to make cloud services easier to consume, especially for SMBs. Adamiak said there is substantial interest from cloud service providers in pursuing Cloud Brokerage offerings, primarily because it increases the relevance of the cloud provider by providing an easy place for customers to buy a range of cloud services, and it provides an incremental revenue stream opportunity for the provider by acting as a channel for additional cloud services.

At the enterprise level, what’s starting to emerge is a variation on Gartner’s hybrid cloud concept. There’s a ton of legacy IT out there and enterprises are not only trying to figure out how to integrate their cloud, but how to integrate their cloud services with the infrastructure they’ve had running for years. “I think they are a lot more pragmatic about cloud at the enterprise level.”

Another major trend, although currently happening more in Europe and the rest of the world, is the emergence of the mobile cloud. Service providers are grappling with how do businesses extend existing cloud services to mobile, and how to ensure reliable networks. Interest in the mobile consumer cloud, or personal cloud is also starting to show up, said Adamiak. “Consumers have data, photos, all in the cloud, and we’re seeing a lot of interest in that.”

This is still early days for the cloud. Most of the large telcos have cloud offerings in their markets, but it really hasn’t hit the initial wave of cloud build-out… [largely because of the] economic slowdown, he said. “Even when spending was tight it was perceived as an area of future growth. To get to the initial build-out was substantial CAPEX, but given what telcos spend, it was nothing.”

 

 

 

Author: Steve Wexler

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