Cisco Enters the Cloud Game

After impatiently sitting on the cloud (SKYY) business sidelines for a few years, Cisco Systems, Inc. (NASDAQ:CSCO) announced a comprehensive strategy to enter this hot arena.

Called CloudVerse, Cisco will put together three components: a Unified Data Center, Cloud Intelligent Network and Cloud Applications into one portfolio for a company’s data center requirements. This will enable companies to meet their computing, networking, collaboration and software automation and management needs.

For those companies interested in building a cloud to either resell these services or to meet internal needs, Cisco can get it done for them.

They have also listed a few high profile CloudVerse customers already on board, including Verizon Communications, Inc, (NYSE:VZ) recently acquired Terremark, Telecom Italia (NYSE:TI), Telefonica Spain (NYSE:TEF) and Fujitsu (FJTSY).

Cisco (NASDAQ:CSCO) will also use this new business as a way to sell more inside its data center through its numerous CIO relationships. One such offering is its Network Positioning System and Cloud-to-Cloud connected. Cisco’s NPS technology enables routers in one data center to begin to automatically look for another one with open capacity for a business on crazy days such as Cyber Monday.

The company has high expectations that its cloud business will expand; however, it’s only a small percentage of its total business. In its November earnings call, Cisco CEO John Chambers said that the Unified Computing System saw a 116% revenue growth from the previous year with a $1 billion annualized business.

Should Cisco hit this number in July’s fiscal year 2012, this area will represent about 2% of the company’s estimated annual sales.

To show their confidence in the cloud business, Cisco introduced the Cisco Cloud Index. This has estimated that more than 50% of computing workloads by 2014 will be run in data centers and that cloud services will see daily traffic running at 1.6 zettabytes per year.

What? Zettabytes? According to the Wall Street Journal, Cisco says this data amount could equate to “four days of high-quality video streaming for every person on Earth.”

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