Cisco Systems, Inc.
) recently announced plans to invest $1 billion over the next two
years to build the world's largest network facilitating cloud
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Cisco declared that it expects to partner with companies like
online consultation provider WebEx, Australian service supplier
Telstra, a large-scale technology provider, Ingram Micro and SAP,
OnX Managed Services. Such collaborations would help it to build
and support the Cisco Cloud Services network and expand its data
centers. Cisco's new service will be sold to consumers directly
as well as through channel associates.
The network will be based on the OpenStack IaaS infrastructure,
to handle a significant amount of work on any virtual machine
manager. It will enable interaction and interoperability between
both private and public clouds. A virtual machine manager, which
is a hardware virtualization system allowing several guest
operating systems (OS) to work simultaneously on a single host
system, will make this possible.
Since Internet-based services are catching on and companies need
to be able to offer the same grade of services at a high level of
security across their customer bases, a platform enabling
interoperability is of utmost importance. This is the need Cisco
aims to satisfy with this endeavor.
The Intercloud service will also take care of the security and
quality of services to ensure the protection of user data from
either professional or government-sponsored prying. The service
will integrate real-time data analytics and application process
interfaces (APIs) for swift application improvement.
However, Cisco faces tough competition from
) Amazon Web Services,
) Azure and
) Cloud Platform.
Cisco, based in San Jose and founded in 1984, designs, produces
and sells Internet protocol (IP) and other networking equipment
to the information technology industry worldwide.
The networking giant is now focused on widening its horizon as it
is facing softness in the global hardware market. Notably, the
global hardware market has been affected by the recent commotion
over the NSA's global Internet surveillance program, which
impacted the company's results in the last quarter.
We believe that Cisco's Intercloud service can help to deliver a
consistent standard of service at reasonable costs, thus boosting
Currently, Cisco carries a Zacks Rank #3 (Hold).