According to the Wall Street Journal this morning, Cisco has big plans to evolve beyond the mere networking gear heavyweight of our time. They're planning to make a late, dramatic entry into the world of cloud computing services today. And by dramatic I mean with at least $1B in cash on tap and ready to spend over the next couple years.
Most of that money will go into building the data centers themselves and filling them with servers. They won't be aiming directly at Amazon, only obliquely. And they don't seem to be aiming directly at the enterprise markets their telecom and infrastructure customers are either.
No, it seems to be aiming at its current customer list, hoping to offer cloud services that telecommunications companies can integrate into their own offerings. In other words, they're hoping that telecommunications operators worldwide will outsource some of their cloud services to a familiar name. Telstra is named as an early partner, for example.
Cisco has been under pressure lately, as being the market bellwether for US vendors has made them a big target and new technologies like SDN will likely keep them on the defensive. But John Chambers doesn't think small, and this is clearly a piece of his way of shifting the company toward the next phase of infrastructure.
The $1B will go quite a ways, but I'm curious how long it will take to get a portfolio of cloud services to market. For that matter, what will be in that portfolio? And does Cisco have the DNA necessary to do this sort of thing?
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