Cisco Steps Into the Everything-as-a-Service Space

Cisco Systems CEO Chuck Robbins last year spoke about the networking giant’s plan to eventually offer its entire portfolio as a service, a nod to the growing demand from enterprises to have on-premises data centers that operate in a more cloud-like fashion.

That means infrastructures that not only leverage automation and can scale up and down in response to fluctuating business needs but also are highly secure and can be bought via flexible subscriptions based on usage rather than through costly upfront capital expenditures.

Hewlett Packard Enterprise in 2019 announced that it planned to offer its product portfolio – hardware and software – as a service by 2022, leaning heavily on its GreenLake hybrid cloud platform. Dell in October 2020 unveiled Project Apex, a similar effort the relies in part on tight integrations with products from VMware, a company owned mostly by Dell.

Robbins had similar plans for Cisco, which has been undergoing seismic changes since he took over in 2015. Like most of its competitors, the company has been transitioning from its roots as a hardware box seller to a software and solutions provider with a growing presence in the rapidly expanding hybrid cloud space.

At the virtual Cisco Live show this week, Cisco officials unveiled Cisco Plus, the first step in realizing Robbins’ as-a-service ambitions. Cisco Plus will essentially act as an umbrella for an array of solutions that combine hardware, software and services that will be offered and that can be bought via a unified subscription. It will include not only Cisco technologies but also products from third-party partners.

“We’ve been talking a lot about Cisco’s as-a-service transition and providing Cisco technology in the most flexible, easiest-to-consume way,” Todd Nightingale, senior vice president and general manager of Cisco’s Enterprise Networking and Cloud organization, said during a press and analyst briefing during the event. “Through the last year, we’ve heard a ton of feedback from our customers on why this is important and why they need to be able to move more quickly. …  We landed on this idea of not delivering just hardware as a service or software as a service, but really looking at full solutions as a service, turnkey offerings that can provide the power of Cisco technology as a service in the simplest possible way, radically simplifying the way we bring the most powerful, most flexible technology in the world to the market.”

First up will be the Cisco Plus Hybrid Cloud offering coming in the middle of the year. It will include data center compute, networking and storage in a model where organizations pay for the technology they use. It also comes with a host of software features around management, visibility, analytics and security. It will include Cisco’s Unified Compute System (UCS) servers and Nexus switching. There also will be storage and software from both Cisco and third parties.

However, Cisco officials see the company’s long history as the world’s top networking vendor and its broad product portfolio as differentiators from HPE or Dell. During Cisco Live, they spoke about its upcoming network-as-a-service (NaaS) plans under Cisco Plus that will launch first later this year with its Secure Access Service Edge (SASE) service. SASE essentially combines edge computing with security.

Cisco currently offers a SASE solution, but customers still have to buy such hardware as its Meraki or Viptela software-defined WAN (SD-WAN) appliances while getting the software that runs on top of it as a service. With the new SASE-as-a-service offering, the hardware and software will be available via a single subscription. It also will include such features as visibility software from Cisco’s ThousandEyes acquisition last year and security capabilities through such offerings as its Duo portfolio.

That will be followed by other NaaS offerings that address data center and campus networking.

Cisco’s NaaS push is a good move, according to Zeus Kerravala, principal analyst with ZK Research. He noted that Cisco has a broader networking portfolio of switches and routers than other data center hardware vendors.

“They’re long overdue” in offering NaaS, Kerravala told InternetNews. “Every other part of IT has moved to an as-a-service model except networking. This is something customers have been asking for for a while. Other vendors have tried it. I don’t think the market was ready for it yet. But giving customers different options of how to pay for products and how to license it is a good thing.”

The move toward a greater as-a-service environment comes as enterprises and SMBs are trying to manage a rapidly evolving IT environment that now includes multicloud and hybrid clouds, edge computing, greater mobility and emerging workloads like artificial intelligence (AI) and advanced analytics. Organizations are demanding greater agility and scalability and a more flexible cost structure.

The push toward digitization and cloud services has accelerated during the COVID-19 pandemic, which almost overnight created a vast remote workforce that companies had to adapt to. According to the 2021 edition of IT management solution provider Flexera’s annual cloud report, 80 percent of enterprises have a hybrid cloud strategy and 92 percent are embracing multicloud. In addition, 54 percent of enterprise workloads will be in the cloud within the next 12 months.

Cisco under Robbins has embraced the changes in IT. Like its peers, the company has moved aggressively to a software-as-a-service (SaaS) approach, relying increasingly on subscriptions and the accompanying recurring revenue structures. The company reported that in the most recent financial quarter, it generated $3.6 billion in software revenue, with 76 percent of that coming via subscriptions.

Cisco also has been working to expand its customer base. Over the past several years, it has been courting mid-market enterprises and SMBs and increasing the amount of business it does through the channel. Nightingale said that one of the goals of the Cisco Plus push is to make the vendor’s technology more accessible to a wider range of companies.

It’s not only because the technologies can now be purchased through a subscription rather than with a large upfront cost, but also because they are delivered through the cloud, making access easier, he said, adding that it “allows small businesses to access technology with a much smaller team, with much less lift. That really helps us drive back that Cisco vision of how inclusive the future is by democratizing powerful technology.”

Kerravala said that many “SMBs like Cisco products, but they view it as too expensive. You can bring the cost curve down. [By offering it as a service], you open it up for a whole lot of other companies. The commercial market with SMBs is one that Cisco has coveted for a long time. There really isn’t a market leader in it. It’s a highly fragmented market, so there’s opportunity there to really nail that market, though Cisco would have to look at different distribution channels. Those types of companies buy from local VARs. It’s different. It’s not just the integrator … It’s a lot of feet on the street, so they’d have to bulk up that part of the channel.”

Jeff Burt
Jeffrey Burt has been a journalist for more than three decades, the last 20-plus years covering technology. During more than 16 years with eWEEK, he covered everything from data center infrastructure and collaboration technology to AI, cloud, quantum computing and cybersecurity. A freelance journalist since 2017, his articles have appeared on such sites as eWEEK, eSecurity Planet, Enterprise Networking Planet, Enterprise Storage Forum, InternetNews, The Next Platform, ITPro Today, Channel Futures, Channelnomics, SecurityNow, and Data Breach Today.

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