Cisco joins cloud enterprise with $1bn investment

Cisco is to invest $1bn (£63m) into enterprise cloud services over the next two years, as it seeks to diversify away from networking hardware, according to a Wall Street Journal report. Cisco’s investment will be concentrated on constructing data centres for the service, called Cisco Cloud Services, which will also reportedly use partners’ infrastructure.

“Everybody is realising the cloud can be a vehicle for achieving better economics (and) lower cost,” Cisco president of development and sales Rob Lloyd told the Journal. Cisco is to discuss the service with customers at a conference on Monday, according to the report.
“It does not mean that we’re embarking on a strategy to go head-to-head with Amazon,” he added.

Cisco could not be immediately reached for comment, but the company said the announcement will be discussed in more depth with customers at a news conference. The news arrives barely a week after Cisco announced its first partnership with a service provider, Telstra, that will see the Australian telco deploy the Cisco Cloud Services platform within its own datacentres.

Cisco Systems is an established name that dominates the market for routers, switches, networking equipments, etc. It is now further broadening its horizon by eyeing the cloud computing. To establish its name in the cloud segment, it made various acquisitions with a motivation to step up its product portfolio for cloud enabled solutions.

It spent billions to acquire various established companies to provide cloud solution under one umbrella of services. Cloupia was acquired for $125 million and Meraki for $1.2 billion by Cisco, both these companies provided cloud management services. It also acquired a company Broadhop, involved in cloud programming services.

As a result of these acquisitions, the company has been able to quickly increase revenue in new markets while maintaining its position in its traditional business.