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Cisco Partner Summit Report: Big Private Cloud Growth Ahead

 
 
By Chris Talbot  |  Posted 2011-03-03
 
 
 

NEW ORLEANS -- Cisco told channel partners gathered here this week for the Cisco Partner Summit that it's not looking to become a cloud provider itself. Rather, Cisco executives said, the company wants to enable channel partners to build cloud architecture and develop cloud services to sell to customers using Cisco gear. To help, Cisco introduced three new cloud designations for partners.

Cisco's cloud focus this week mirrors the focus at other recent industry conferences including RSA and the IBM PartnerWorld Leadership conferences.

As part of its new cloud strategy, Cisco announced a new channel partner program that is designed to help partners take advantage of what Cisco executives referred to as the next big inflection point in the IT industry. The Cisco Cloud Partner Program offers three designations that partners can gain (based on existing certifications, experience and business capabilities) that demonstrate the three key roles every channel partner can play in the cloud.

"You cannot open up a magazine, read a newspaper, watch a TV commercial without hearing the word 'cloud,’" said Edison Peres, senior vice president of worldwide channels at Cisco Systems, during his keynote presentation on at the annual partner conference. "I don’t want to downplay it. It’s important. It’s here. I want to talk about it a little bit more, but I do want to be very clear. If all you see on the horizon is clouds or cloud, I want to suggest your focus is much too narrow. Cloud is part of a broad set of opportunities that we have before us."

With interest in cloud among customers growing rapidly, Peres noted that there is some belief within the industry that the channel partner’s role is going to be diminished because of the difference in rolling out cloud applications and services compared to traditional IT channel partner sales roles. Although he said the channel will need to evolve, there will be plenty of opportunities for channel partners, whether they’re building cloud infrastructure, developing services and applications, or reselling others’ services and applications. Either way, partners aren’t going to be left out of the loop.

The trick for partners will be in choosing the role they want to play in the growing cloud market.

The following three key roles are spelled out in the Cloud Partner Program.

  1. The Cloud Builder level of the new program is for partners that focus on the infrastructure level of the cloud opportunity. Such partners design, build and deploy cloud-ready infrastructure for customers, tying together networking, servers, storage and virtualization.
  2. The Cloud Provider level is focused on partners that will develop and provide public cloud services for the market.
  3. The Cloud Services Reseller will play a strictly resale role, partnering with Cloud Providers to resell their cloud services to customers.


"Choose your role in cloud. It’s here. It’s real. I don’t see it as a threat," Peres said. "I see it as a clear opportunity. But you do need to choose your role. The customer’s requirements are changing. They want scalable, on-demand compute and storage." Customers are also looking to move from capital expenditures on IT to operational expenditures, he added.

In some ways, customers are better prepared for the new world of cloud computing than the IT industry, Peres said. It’s taken some time for the technology to evolve to the point that it’s now able to meet customers’ requirements. The cornerstone of private cloud infrastructure is tied into the Virtual Computing Environment (VCE), the company formed as a joint venture of Cisco, VMware and EMC. Cisco expects cloud infrastructure to grow at a compounded rate of 25 percent per year over the next few years, with 75 percent of that infrastructure growth coming from private clouds.



Cisco executives see the company’s role as being the provider of the technology used to build private clouds and enable the development of cloud services rather than a broad-based cloud provider. Peres noted that several of Cisco’s competitors are taking the opposite approach.

Although Cisco does offer a few hosted applications, most notably WebEx and IronPort, the company’s overall strategy is to enable partners to build clouds and cloud services and applications rather than build them itself, said Susheel Chitre, director of cloud and OEM business development for worldwide channels at Cisco Systems.

"If you look at the services we have, WebEx or IronPort, I think those are the services that we had and acquired, and I think they’ll continue. Our intent is not to be a broad-based cloud provider. There are specific applications that might make sense as a complementary market that we’re entering," Chitre said.

Cisco’s primary goal with its cloud strategy is to enable rather than compete with partners, as well as to be as partner-friendly as possible in the emerging and rapidly growing cloud computing market, Chitre said.

Additionally, Cisco is also enabling partner-to-partner collaboration. For instance, a Cloud Builder partner may construct a cloud infrastructure for a Cloud Provider. The cloud services that the Cloud Provider partner develops may then in turn be sold by a Cloud Services Reseller partner.

It’s unlikely a single partner would have all the capabilities necessary to be everything to everyone, and that’s where partner-to-partner collaborations will come in.

"The way we designed the program was structured around what roles can partners play in the marketplace and how can we uniquely enable partners who choose to play any one of those roles," Chitre said.

Through its programs, Cisco has put support mechanisms in place to make it easier for partners to build a cloud practice, no matter which role they choose. Financing is available to help partners get up and running without a significant up-front investment. The partner role designations are granted based on existing certifications and capabilities, so partners will be able to get started quickly. In fact, Chitre said several partners came up to him at Partner Summit and asked if they could get started immediately.

A common belief in the industry is that cloud for businesses will move towards a hybrid cloud environment that connects private clouds to on-premise and public cloud infrastructure and services. Cisco’s strategy follows a similar line of thinking, with the expectation that most enterprise customers will move towards a hybrid cloud infrastructure. And Cisco plans to be there to support its partners in building cloud practices instead of becoming a provider itself.