Cisco Displays New Cloud Data Center, Touts Efficiency
Data Center Hall in Cisco's new green data center. — Cisco today took the covers off a new Allen, Texas, data center that will serve as the foundation for Cisco's private cloud computing effort, which it calls Cisco Elastic IT Services.
Context & Ripple Effects
This data center opening lands three days after Cisco's decision to shut down the Flip camcorder line — acquired via Pure Digital for $590 million — along with 550 consumer-business layoffs, making the sequencing legible as portfolio triage: exit consumer hardware, concentrate on infrastructure. The Allen, Texas facility is the physical base for Cisco's long-rumored move toward servers, a question GigaOM first raised back in March 2008.
The private-cloud effort, Cisco Elastic IT Services, also builds on years of groundwork: Cisco has been pushing deeper into virtualization since at least its 2008 virtualization push, and the February 2011 acquisition of video-software firm Inlet Technologies showed it still buying capability adjacent to the data center even while cutting consumer lines.
First-order effects
- Cisco now operates its own cloud offering — Elastic IT Services out of Allen, Texas — putting it in direct contact with enterprise workloads rather than only selling the gear that runs them.
- The efficiency pitch gives Cisco a live reference facility to anchor sales of its data-center switching and unified-computing equipment against rivals' claims.
Second-order effects
- Rivals in the unified computing race — HP, IBM, and the emerging colocation-plus-cloud providers — face a vendor that can bundle hardware, software, and now operated capacity into one enterprise offer.
- The same week's Flip shutdown signals to partners and buyers that Cisco's capital and R&D will flow toward data center and networking, sharpening expectations for where future acquisitions like Inlet will point.
Third-order effects
- If the pattern holds, networking vendors evolve from box sellers into hybrid infrastructure operators, blurring the line between equipment maker and service provider that defined the industry through the 2000s.
- Energy efficiency becomes a competitive metric in enterprise data-center procurement rather than a marketing afterthought, pressuring the whole vendor ecosystem to publish comparable figures.
The trend: Network-equipment makers are converting their data-center hardware franchises into operated cloud platforms, using efficiency and owned facilities as the wedge into enterprise workloads.