Cisco's evolving software, cloud strategy will hinge on hardware

Jim Duffy

Cisco also announced this week the Cisco ONE Enterprise Cloud Suite, which is designed to simplify the deployment of hybrid clouds by combining several deployment disciplines into a single model. The Enterprise Cloud Suite includes tools to combine on-demand service catalogs, infrastructure configuration and policy automation, workflow automation, and support for multiple hypervisors.

For users looking to off-load IT operations to the cloud, Cisco this week rolled out Cloud Managed IT. This service offers a cloud model for managing on-premises IT infrastructure, including switches, routers and security appliances, in addition to the WLAN gear Meraki already addressed.

"As the market gradually embraces cloud for rolling out various networking technologies, the market potential for cloud-managed enterprise networking is significant," says Rohit Mehra, vice president of network infrastructure research at IDC. "What started as a niche segment in the enterprise WLAN market, is slowly but surely spreading to other networking/security domains such as LAN, WAN, and security."

The Cloud Managed IT service provides centralized management of users, applications, mobile devices, firewalls and VPNs, and provides content filtering, intrusion prevention and location analytics, Cisco says. And it integrates with on-premises management through support for Cisco's Prime Infrastructure management platform, Identity Services Engine policy system, and Connected Mobile Experience, Intelligent WAN and Sourcefire threat detection offerings.

Cloud Managed IT is targeted at enterprises managing thousands of sites that don't have IT personnel at every site, Cisco says.

Mehra says Cisco will face competition from virtually every company offering a broad or niche cloud managed service for infrastructure.

"Cisco Meraki, as the incumbent and market leader, would see competing platforms and solutions from some of the cloud-managed networking vendors, including Aerohive, Aruba, Ruckus, besides others," Mehra says.

Aerohive, relative to its size, has a broad cloud-managed portfolio, including WLAN, LAN and WAN. Aruba and Ruckus are more focused WLAN vendors, both growing rapidly. Besides network vendors, the systems integrators and managed service providers who cover networking, also will potentially compete in this emerging market segment- as this cloud-based "as a service" networking model grows and gets more traction with enterprise IT."

There will also be opportunities for cooperation between these competitors as MSPs need technology vendors for their innovation, and technology vendors need MSPs for channel distribution, Mehra says.

IDC estimates the market for cloud-managed WLAN products and services to reach $2.5 billion by 2018. Adding other IT components naturally will expand this to multiple billions of dollars.

But this is still small compared to traditional on-premise technologies for networking and communications, a market that will exceed $46 billion by the year 2018, according to IDC.

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