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Cisco cloud strategy emerges: Not another hosted app service

Cisco laid out its cloud strategy here at the Cisco Partner Summit this week, with one very clear message: The company will not be the next Microsoft selling its own hosted applications through armies of resellers.

NEW ORLEANS -- Cisco laid out its cloud strategy here at the Cisco Partner Summit this week, with one very clear message: The company will not be the next Microsoft selling its own hosted applications through armies of resellers. Instead Cisco wants its channel partners to “enable” public and private clouds through infrastructure build-out and offer their own hosted services.

That said, eventually Cisco partners that build their own clouds will provide Cisco-powered applications. It is not entirely clear what those applications will be, but Cisco is currently trialing hosted video and voice, sources say.

“We are not going to compete with partners in the world of cloud by developing our own cloud offering,” said Edison Peres, Cisco senior vice president of worldwide channels.

At the summit, executives outlined the Cisco Cloud Partner Program, a three-track specialization plan to be available in August that will enable partners to become Cloud Builders, Cloud Providers and/or Cloud Services Resellers.

Cloud Builders will provide cloud infrastructure for enterprise private clouds as well as public clouds for service providers. Cloud Providers will build their own clouds from which partners will sell their own hosted services, eventually selling Cisco-branded applications that are currently under trial. Finally, partners that don't want to build infrastructure can resell services from other Cisco partners that have their own clouds. Cisco will create a program that matches the cloud haves with the cloud have-nots in its channel, offering financial incentives toward these partnerships.

Cisco cloud strategy promotes itty-bitty to great big partner-hosted clouds

At the summit, Wendy Bahr, Cisco senior vice president of global and transformational partnerships, stressed that the program had “an entry level component” and would “go all the way up to the most robust public and private clouds,” making room for every level of partner to get involved.

But the infrastructure build-out track -- which Cisco execs said would eventually be the largest portion of the program -- is definitely reserved for larger partners with multiple specializations and the money to invest in becoming professional services providers.

To prove that their infrastructure builds competency, partners must hold Cisco certifications in advanced networking, security, and compute or data center networking. In addition, they've got to prove storage knowledge by having higher level specializations from either EMC, NetApp or Hitachi, as well as virtualization competency through certifications from Citrix, Red Hat or VMware. Microsoft virtualization certification is notably not on that list.

In order to gain the Cloud Builder badge, partners must train with Cisco to provide professional services for the cloud. That will mean paying to participate in either the Cloud Practice Management Accelerator, Cloud Technical Consulting Accelerator or Cloud Workshop Accelerator programs.

Partners in the Cloud Provider program must meet a number of requirements, including having a dedicated cloud sales team. In addition, they must show validated Cisco cloud auditing, offer cloud-specific orchestration and service portals, meet resale requirements for Customer Premise Equipment, and be able to offer one Cisco Powered Cloud Service. Resellers of cloud services will have the easiest entry point, needing only to prove a valid OEM relationship with a Cisco cloud provider, as well as demonstrated ability to do billing and have a Cisco Premier Resale Agreement.

The steepest learning curve in the cloud will be for those partners that “grew up selling hardware,” said Skip Tappen, COO of Cisco partner NWN Corp. At any level, partners will have to learn a new business model from Cisco that won't necessarily depend on one-time, up-front sales margins, and will include new billing applications, the need to provide service level agreements (SLAs) and a different level of management.

“This is Cloud 1.0, but it's a really good start,” said Tappen, adding that Cisco is taking steps to get partners directed toward the cloud at a time when lots of them are very concerned about what their role will be in this new cloud-oriented world. NWN is an early adopter of Cisco's cloud services and is building out its own private cloud, but will also build infrastructure for customers.

Getting into Cisco's new cloud program will mean heavy investment on the part of partners, so Cisco also announced a series of financial incentive and support plans to ease the transition.

Cisco also said it will offer a number of financial incentives to ease the transition for these partners. One of those is the Cisco Capital Jumpstart program that offers one-year interest-free financing for partners that make at least a $1 million investment in building out a Cisco-powered cloud. Partners will also receive rebates related to Cisco cloud services under the Solutions Incentive Program (SIP) and the Opportunity Incentive Program (OIP).

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