Cisco to broaden its cloud computing offerings

Cisco Systems doesn’t want to go up against service providers in delivering computing infrastructure to organizations, according to company executives.

But the networking giant, which already delivers online collaboration through its WebEx offering, made it clear Tuesday that in other areas of cloud computing it could be a vigorous competitor by saying it will broaden its software as a service portfolio.

The company’s strategy was outlined during in an online briefing for industry analysts and the media as part of a two-day session describing the company’s collaboration and cloud computing competencies and goals.

“We don’t necessarily want to be a service provider,” Padmasree Warrior, Cisco chief technology officer, told analysts in a morning session. “In the sense of offering computing resources … we probably won’t get into [it],” she said. “It’s contrary to our business model because it requires us to build huge data centres and invest billions of dollars…. Plus it puts us into competition with the service providers, who are our customers today. So I don’t see us doing that as a mainstream business.”

However, both she and Doug Dennerline, senior vice-president of Cisco’s software group, detailed the software as a service offerings of the company, which include WebEx for shared meetings, WebEx Connect (which adds notification, chat, audio and video conferencing as well as document and task management) and security services.

“We’re also looking at an additional collaboration suite of application that we can integrate.” Warrior said. “Some of them will come from a Cisco-hosted cloud, and some of them will come from a service –provider hosted cloud and some will be on-prem.”

Dennerline added that thanks to Cisco’s hosted WebEx Mail service the company has “large amounts of storage” that could be used to offer paid off-site storage or backup services to small businesses.

Organizations are increasingly becoming attracted to the numerous provider offerings that come under the umbrella of cloud computing – ranging from off-site storage to end-user applications to complex computing services such as Amazon Web Services.

The Yankee Group, an IT market research firm, believes that by 2012 more software will be bought as an online service than packaged applications.

Still, Cisco believes that organizations won’t easily give up IT infrastructure they’ve invested heavily in. Nor, Warrior added, are many organizations willing to trust all of their data to the cloud, a place where security and service level agreements are open questions. “I don’t know of a single large enterprise customer that’s willing to give up all of their data into a public cloud,” she said at one point.

Cisco is trying to position itself as a company that can help organizations bridge their internal IT operations with cloud computing. At the same time, its aim is to beef up its software as a service collaboration offerings. For example, at the end of the summer WebEx Connect will add instant message and presence connectivity as a result of its acquisition earlier this year of Jabber.

Today, collaboration is fragmented, Warrior argued, with voice, audio conferencing, video conferencing, document sharing, instant messaging and e-mail not integrated well. “One of the efforts we’re putting together… is how do we bring all these capabilities to a new architecture that is enterprise-class,” she said.

Dennerline said Cisco thinks of WebEx as a “product portfolio” of applications it still wants to add to. “We look at WebEx Connect a little bit like ‘revenue per user’ – what other capabilities can we bring that people will pay us for to be part of that experience.” He gave as an example the ability to add high-definition video to a WebEx session instead of standard video.

Zeus Kerravala, a Yankee Group’s senior vice-president for enterprise research, who was on the conference call, said in an interview later that Cisco’s software as a service strategy for collaboration is targeted at Microsoft.

“If you look at the way unified communications is going, it’s moving very rapidly to the desktop, and with Microsoft’s strength there, if it (UC) stays as a traditional packaged app type of delivery I’m not sure they (Cisco) have a strong enough offering to compete. I think WebEX is better than what Microsoft has [with Office Live Meeting], so from that aspect they can compete properly. So I certainly expect them to push that delivery model.”

“Microsoft obviously has the ear of the customer in desktop software, so if Cisco’s going to try and grab share in presence or e-mail, it’s not going to be by outdoing what Microsoft does well. The alternative is pushing the cloud, which has benefits: It’s pay as you go and as long as the experience stays the same the simplified backend architecture makes it easier to deploy.”

There are any number of other collaboration vendors, including Avaya, Polycom, IBM’s Lotus Live, and, soon, Google Wave. But other than Wave they don’t have fully developed software as a service offerings, Kerravala said. And in the collaboration market, he agreed, that’s’ essential.