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Cisco plans $1B investment in global cloud infrastructure

Cisco Systems plans to invest over US$1 billion to expand its cloud business over the next two years, including building an OpenStack-based “network of clouds” with partners.

The whole IT industry is moving to a world where more applications are running in hosted environments, and Cisco doesn’t want to be left behind. The key building blocks of this push are Cisco Cloud Services and what the networking giant has dubbed an Intercloud, which will be hosted across a global network of Cisco and partner data centers, it said on Monday.

The Intercloud will be based on the increasingly popular OpenStack platform, and it will support any workload, on any hypervisor and interoperate with any cloud, both private and public, according to Cisco. By not going at it alone and instead partnering with local providers, Cisco’s network of clouds will better positioned to address rising data sovereignty concerns, it said.

The continued revelations from former U.S. government contractor Edward Snowden about National Security Agency snooping have become a battle cry for local cloud providers across Europe as they try to compete with U.S. companies such as Amazon Web Services and Microsoft.

The promised size of the Intercloud will also make it a good fit for machine-to-machine applications or the so-called Internet of Everything, according to Cisco.

Delivering on all these lofty promises will be a huge challenge for Cisco. The company is late to the game and will have to compete with public cloud providers including Amazon and Microsoft, as well as Google and Rackspace. It will also have to compete with infrastructure vendors such as VMware that want operators to build an infrastructure based on its products.

Australian telecom carrier Telstra is the first of many partners in this venture, Cisco said. It will deploy and run a cloud infrastructure on behalf of Telstra, and Telstra will provide both Cisco and Telstra-specific services.

Other partners that are either planning to deliver Cisco Cloud Services or have endorsed the Intercloud initiative include Canadian communications provider Allstream; European cloud company Canopy, which is owned by Atos; and wholesale technology distributor Ingram Micro, Cisco said without elaborating on which company had done what.

Cloud Services is an expansion of its existing the Cisco Powered program. The line-up includes a version of SAP Hana optimized for Cisco’s Unified Compute System; its own desktop virtualization product as well as solutions from VMware and Citrix; and a number of in-house developed services for hosted security and collaboration. Cisco plans to sell these services through channel partners and directly to end customers, it said.

Cisco is announcing its $1 billion cloud push at the company’s Partner Summit conference in Las Vegas this week.

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