Cisco’s Billion Dollar Cloud Bet

Cisco is synonymous with computer networking. In efforts to stay on the cutting edge of networking and computing technology, Cisco has pledged to invest $1B in its cloud efforts over the next 2 years. This $1B investment will be spread out over several different sectors. Most of the money will be spent building out datacenters. Cisco has formally called their new service “Cisco Cloud Services.”

This move pits Cisco against some of the fiercest competition in the cloud market today. Cisco’s billion dollar investment will help the company go toe to toe with Microsoft, Amazon and IBM in the public, hybrid and private cloud arenas. Although this $1B play looks like a direct shot at the competition, execs at Cisco beg to differ. Rob Lloyd is the President of Development and Sales at Cisco and he was quoted in the Wall Street Journal as saying, “It does not mean that we’re embarking on a strategy to go head-to-head with Amazon. Companies are looking for different ways to get IT done.” Lloyd continued on to mention that, “Everybody is realizing the cloud can be a vehicle for achieving better economics [and] lower cost.”

It makes sense that Cisco would want to join the cloud race. Many cloud analysts such as EMC President of Advanced Software Division Amitabh Srivastava say that “Cloud Computing is still in its early days.” Cisco has seemingly realized this fact which is why the networking giant looks to gain market share in a sector it helped create. Cisco’s networking equipment is what many network administrators first started using when datacenters were built out using traditional means. One of the more intriguing possibilities of Cisco’s cloud service is their take on Software Defined Networking in the cloud. SDN is poised to be a major driver in cloud innovation and Cisco could take the lead on this technology given their substantial investment in cloud services.