Cisco Systems is jumping into the cloud computing industry and will offer services to corporate customers in the coming years. Specifically, the company will invest $1 billion over the next two years to build data centers.
Cisco Cloud Services, as the new service is called, will be geared toward corporate clients that wish to rent computing services instead of buying and managing their own servers. It is expected to compete with a similar product from market leader Amazon although Cisco won’t be going at it alone.
Rob Lloyd, Cisco president of development and sales, said companies are looking for different ways to get IT done. He added that everybody is realizing the cloud can be a vehicle for achieving better economics and lower cost but was also quick to point out that they’re not planning to go head-to-head with Amazon.
Amazon is largely credited with leading the way in the industry. Their offering, known as Amazon Web Services (AWS), brings in at least $3 billion in revenue each year. According to financial firm Robert W. Baird & Co., every dollar spent on AWS replaces $3 to $4 that a company would otherwise spend on traditional IT services.
A number of Amazon’s customers are startups that have never had their own IT gear. Cisco, on the other hand, will focus on established companies and government agencies that already have their own infrastructure but may want to offload some chores to the cloud.
Early partners are said to include Telstra Corp. and Allstream Inc.