No IT cloud for Cisco

Company outlines SaaS strategy and where it will, won't compete

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Cisco says it will compete in the SaaS, collaboration platform and IT foundation areas of cloud computing. But it has no plans for offering IT compute as a service, company officials said during the Cisco Live Virtual conference today.

Citing data from IDC, Cisco says cloud computing will grow 27% compounded annually from 2008 to 2012, reaching $42 billion by that time. This is five times the rate of current enterprise IT spending, Cisco says.

Cisco also says there are four distinct markets, or layers of markets, emerging within cloud computing -- SaaS at the top, then collaboration platform services like WebEx, compute sevices and lastly, IT foundation, or infrastructure.

Cisco intends to compete with Microsoft, Google, IBM, HP and others in all but compute services. That would encroach on the turf of service provider customers like Savvis, which is using the new Unified Computing System (UCS), the key foundational element in Cisco's cloud computing vision.

"We don't necessarily want to be a service provider," said CTO Padmasree Warrior, though adding the company will provision WebEx and security services from a Cisco cloud.

Cisco, however, might compete with Microsoft and Google is offering office applications like documents, spreadsheets and presentation packages. Cisco is "thinking about it but not there today," said Doug Dennerline, SVP and GM of Cisco's collaboration software group.

Already in service provider clouds is Cisco's Call Manager IP Telephony offering. Some of them are selling it as a service, Dennerline says. Cisco also plans to bundle Call Manager and WebEx with UCS as well, he said.

Cisco differentiates itself in its ability to stitch together on-premise facilities with public, private or hybrid clouds, and secure the entire environment via the network infrastructure, Dennerline said. It avoids commoditization -- hardware and otherwise -- by layering on features like policy, governance, security and high availability, and then balances that with a mix of on-premise and cloud-based infrastructure and the ability to "federate" between them.

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