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Cisco's Cloud Strategy: 'We're Not Amazon'

The cloud represents a significant opportunity for many vendors across the IT landscape.

And yet, while enterprise networking giant Cisco is actively pursuing several different avenues for its cloud business strategy, it's not aiming to displace existing cloud service providers like Amazon.

Instead, Cisco (NASDAQ:CSCO) has a vision that entails playing in several other core areas of the cloud that could one day see it taking on other major names -- like Google. That's according to Cisco executives who detailed the company's goals during an online presentation from Cisco's Networkers conference, taking place this week in San Francisco.

According to CTO Padmasree Warrior, there are four layers in the value chain for cloud computing, and Cisco is operating in three of them.

Rather than compete with existing cloud services like Amazon, Cisco is aiming to be the enabler of cloud-builders, both private and public. But that also doesn't mean that Cisco won't offer cloud-based software services that could one day compete against the likes of Google Apps.

"Cisco's strategy is to play in the SaaS [Software as a Service], platform as a service and the IT foundation layer," Warrior said. "We do not have plans to become an IT-as-a-service provider. In other words, we will enable service providers by supplying them with infrastructure rather than provide ... compute as a service."

It's a critical difference for Cisco, which is looking to parlay its own experience and infrastructure -- along with several recent acquisitions -- into a bigger slice of the cloud. But at the same time, it doesn't want to step on the toes of companies that may become its customers.

Warrior explained that in the company's view, the top layer in the cloud is SaaS, underneath which is platform as a service -- a term that in her view includes when software development frameworks are delivered on a subscription service, like Cisco's WebEx connect platform.

Sitting beneath the platform is the infrastructure-as-a-service layer, where compute resources are delivered on a subscriptions basis -- the space in which Amazon (NASDAQ: AMZN) Web Services operates.

And underneath it all, at the foundation layer, are the datacenter technologies and hardware that enables cloud networks.

"In the third layer of infrastructure as a service, we don't want to necessarily provide compute from a Cisco cloud," Warrior said. "WebEx is a cloud service but we provide the application, not compute as a service, so it's different from the Amazon model. We want to enable service providers to be the infrastructure-as-a-service provider."

Where Cisco draws the line

Warrior said one emerging use case is a growing interest among enterprises to build their own clouds to take advantage of their own resources. But integrating private and public clouds is a challenge, and one on which Cisco is currently working, according to Warrior.

Considering that Cisco already has significant datacenter assets used to deliver its existing WebEx services, one might think that it could be an infrastructure-as-a-service cloud provider as well.

Warrior, however, dismissed that idea.

"IT as a service, in the sense of us actually selling compute resources as utility computing, is something we won't get into, as it is counter to our business model," Warrior said. "It would require us to build huge datacenters and invest billions of dollars. Plus, it puts us in competition with the service providers who are our customers today. I don't see us doing that as a mainstream business."

[cob:Special_Report]Cisco does have and will continue to build out its own Cisco-hosted cloud. Currently, that cloud is used for WebEx collaboration, but it will be expanding this summer to add new services.

Among the new cloud hosted services that Cisco is set to roll out is WebEx mail, which is Cisco's new hosted e-mail service based on its PostPath acquisition. Cisco already offers cloud-based e-mail security services.

Doug Dennerline, senior vice president of Cisco's software collaboration group, added during the presentation that the company is also evaluating other cloud-based services to deploy -- including storage. He noted that Cisco has large amounts of storage available that could be deployed in a cloud backup scenario.

According to Dennerline, Cisco is not planning on competing against Salesforce.com or other CRM vendors like Oracle that offer cloud-based CRM.

On the other hand, Cisco could potentially compete at some point in the future with Google Apps, which offer cloud-based office applications.

"On the app side, we're thinking about that, but we're not there today," Dennerline said.