It's not really about UC, it's about boosting traffic and establishing Cisco as a player in the cloud.
This month, Cisco did a series of announcements on collaboration, linked to their "Collaboration Summit". For UC types this could be exciting, maybe an indication the market was going to get really hot. For pragmatists, it seems a bit odd that Cisco would spend so much time on collaboration, which surely is a very small piece of its revenue pie. Look deeper, though, and you see the truth. It's not really about UC, it's about boosting traffic and establishing Cisco as a player in the cloud.
The primary focus of Cisco's announcements seems on the surface to be the expansion of their Hosted Collaboration Solutions (HCS), a kit of services offered in hardware/software platform form to providers who want to do telepresence, contact center, and UC. Given Cisco's long-standing efforts to promote router purchases by threatening buyers with exponential traffic growth, telepresence and all forms of video collaboration have always been attractive to them. The problem is that high-cost telepresence is a big jump from voice calls and casual Skype video. A nice on-ramp for buyers would help.
The new Cisco approach is to cloak telepresence in something more populist, which is the video collaboration of WebEx and a framework for collaboration that includes telepresence but doesn't demand it. The lower buy-in threshold makes the Cisco approach more attractive to partners, which is why HCS is a primary vehicle. Cisco wants network operators and cloud operators to use Cisco technology to offer UC/UCC services to others, and not just because it boosts telepresence opportunity and video traffic.
But even a more attractive wrapper for high-end video isn't the real story for Cisco. They want UC/UCC offerings to be based on Cisco's Cloud Applications and Services (CAS) model. Why? Because CAS is the core of the real Cisco strategy for the cloud. Cisco needs to deal with two cloud issues--one short-term and one long-term--and CAS is their pathway to solving both.
In the near term, Cisco's biggest cloud problem isn't its traditional competitors, it's its allies. Allies like who? Well, VMware comes to mind. Cisco has relied on VMware tools for lower-level cloud-building for some time, but recently it's released its own version of OpenStack and started to roll it out in their internal applications. There have also been recurring Wall Street rumors (unconfirmed at this point) that VMware's parent EMC was looking to buy Cisco arch-rival Juniper Networks.
Truth be told, Cisco, like all of the supporters of OpenStack, is trapped in a cut-throat cloud market with cloud software based on the same framework as its major competitors, including HP. If Cisco can layer an application framework on top of the basic cloud software, they can differentiate themselves.
The solution is a classic camel's-nose approach to marketing. Get an application that operators see as a broad near-term, revenue opportunity (UCC and WebEx), build it on a platform that has considerable value to other applications (CAS), and you have an ongoing edge with network and cloud operators. HCC drives partners to CAS, CAS drives partners to more Cisco-based apps, and all this drives Cisco revenue upward. Not to mention undermining VMware's incumbency and making OpenStack into table stakes rather than a cloud enabler.
So does this mean Cisco wants you to run your IaaS on Cisco's CAS? No way, and that brings us to the long-term problem of the cloud. Cisco is realizing that IaaS isn't what the cloud opportunity is going to be about. They're looking ahead to the future, when network operators and cloud providers all join in to provide higher-layer SaaS and feature-as-a-service offerings. Want home security? It's a CAS offering, or so Cisco hopes. Same with bill-paying, booking tables at restaurants, watching live video of Jack's and Jill's soccer matches...you get the picture.
Hosting virtual machines via IaaS is a low-margin business and Cisco figures that operators aren't interested in getting themselves into another of those, just as return on network investment is dropping. They're prepared to let VMware or OpenStack competitors fight for virtualized crumbs while they fly up to the top of the food chain to dine.
In cloud terms, CAS might be Cisco's platform-as-a-service middleware to build all those services the operators want to sell. This market space is a green field if ever there was one, because all the cloud giants are still wearing IaaS blinders and chasing Amazon. There are no open-source tools for this new cloud mission either, so Cisco isn't competing with free software that all its competitors could adopt in an instant.
If Cisco can get CAS going quickly, they could have the only solution to the "service-as-a-service" cloud model. That would let them advertise to promote that market, because it would promote only Cisco. By the time competitors had any idea what was happening, Cisco could be sitting on the goal post thumbing their nose.
Then again, they could mess it up. Cisco's reputation has traditionally been as a "fast follower", but the new world of platform-as-a-service middleware is different: CAS is a leadership position. The question is whether Cisco is a fast-follower by its corporate nature (and thus can't change), or whether it simply accepted this role because in earlier generations, networking as an industry defined "differentiated" as "proprietary," and thus Cisco would always have found itself developing a future shared market at its own expense if it jumped out aggressively in a new area.
If Cisco accepts that they're now operating in a new environment, CAS could be their breakout opportunity. If they're just risk-adverse, then this new positioning is only going to confuse buyers and alert competitors who may be more inclined to be bold.