Cisco is betting heavily on the network as the platform. We took a look at the role of the network in the emerging landscape of cloud computing as part one of analysis of "Will One Company be Dominant in Cloud Computing". We started with Cisco, since the cloud implies the network to float upon.

Like religion itself, Cisco is a company that evokes deep emotions. Many IT leaders believe in Cisco and bet their operations on the company. And to unbelievers, using Cisco gear is one of the deadly sins.

Following that analogy, on the first day, there was IP. And the Internet was formed. And on the second day there was virtualization, and the virtual machine was born. On day three there was pay-as-you-go computing, and Amazon released EC2. On day four, the iPhone was released. And there was rejoicing.

We're not sure yet what will happen on days five and six - but on the seventh day, there was a globally interconnected cloud, powered by the Internet, IP, and more than likely, Cisco gear. In Cisco's prophecy, this leads to The Human Network.

Cloud Computing is the Next Version of the Internet

Cisco enjoyed massive benefits in the first phase of the Internet in the late 1990s. Its gear powered the Internet, and the market rewarded the company for its leadership. Cisco's business was built by the enterprise and their huge appetites for interconnected networks to connect companies and power Web applications.

To diversify and expand its opportunities in the late 1990s, Cisco made big bets in the service provider and SMB marketplace. In the service provider space, Cisco drove combining voice, data, and video networks. In SMB, Cisco entered into the commodity space with Wi-Fi and lower-end products. These have paid off and have positioned the company to be ready for the next phase of the Internet.

Charting Cisco's performance from its first day on NASDAQ 20 years ago to today shows a massive spike in its stock price during the rise of the Internet.

In the next phase, we're seeing a repeat opportunity for Cisco to assist in the disruption of the datacenter in the move to virtual data centers and private clouds. At the same time, the company is going further in the hottest area of the service provider opportunity to the core of mobile computing.

We wonder, will the market see another spike in Cisco as cloud computing goes mainstream?

IP Everywhere - Networking is the Platform

Cisco has invested in several trends that will define the next generation of the network. The network is a complex thing. If anything, the opportunity for Cisco is also the risk. Can it manage these complex infrastructures and prove that it is the one company that can bring it all together?

First, working closely with VMware, Cisco has defined the virtual data center. The virtual data center is one with an aware unified fabric. Cisco's Nexus switches bridge storage, virtual instances and network.

To get a high performing distributed virtualized data center, it is important to have all servers on a switched network, deployed as the same Layer 2 VLAN. This means extending VLANS over Layer 3 routed networks. To do this, Cisco has brought a new data center interconnect solution called Cisco Overlay Transport Virtualization (OTV), which has the goal of providing the performance of Layer 2 while still preserving most of the scalability, resiliency, multipathing, and failure-isolation characteristics of a Layer 3 connection.


"OTV can be thought of as MAC-address routing, in which destinations are MAC addresses, and next hops are IP addresses. OTV simply maps MAC address destinations to IP next hops that are reachable through the network cloud. Traffic destined for a particular MAC address is encapsulated in IP and carried through the IP cloud to its MAC-address routing next hop. The rich information in the MAC-address routing protocol enables Layer 2 connectivity over Layer 3 networks based on MAC-address destinations."

The second major area of innovation Cisco is making news in right now is the mobile core.

Cisco announced in December 2009 that it has finished the acquistion of Starent Networks for over $1billion this year. The combined Starent-Cisco puts the company in a key leadership position in routing mobile data, delivering an end-to-end mobile multimedia IP architecture for the mobile operator packet core. Cisco sees the Internet of Things coming, and connecting mobile operations with virtualization is a part of making it all hapen. Virtualization and mobile coming together - two major trends that will form the future of cloud computing.

This week, Cisco CEO and board chairman John Chambers shared his thoughts at Mobile World Congress on the value Cisco is bringing to the service provider.

As the Next Generation Emerges, the Stakes are High

On one hand, there is a joining that's happening where we see Cisco, EMC and VMware partnered in a significant way. The announcement in November 2009 describes a vision where the companies offer enterprises a coordinated set of solutions. These solutions cover the core three tiers of computing: OS, storage, and network.

But on the other hand, HP and Cisco are parting ways. Even in the best of times, this relationship was a bit strained as Cisco and HP have been both competing and cooperating over the last few years. The companies signed a global partner agreement. But Cisco competes with HP in unified computing, and HP has introduced the ProCurve line of network devices and purchased 3Com. Now Cisco has decided to pull HP out of its partner program. HP seems to be the one company (outside of its network compeitors) that wants to challenge Cisco's destiny.

Does cloud computing give Cisco a second chance to outperform the world as a dominant vendor? What are your hopes or fears of a Cisco-powered cloud computing fabric?

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