Cisco acquires Metacloud, boosting Intercloud, OpenStack efforts
Summary: The privately-held cloud player will be snapped up for an undisclosed sum as the networking giant aims to bolster its inter-connected cloud effort, run on open-source OpenStack. — Zack Whittaker
Context & Ripple Effects
Cisco's move extends a distributed-cloud ambition it has been building since the VCider acquisition in October 2012, which targeted the same vision of cloud capacity spread across many locations rather than concentrated in a few hyperscale regions. Metacloud brings what Cisco lacks in-house: a privately-held company already operating OpenStack clouds for enterprise customers.
The timing matters because OpenStack has been hard going for buyers — enterprises hit bigger-than-expected problems migrating between releases as far back as late 2013, per the corpus. Buying an operator with production experience, rather than contributing code upstream, is Cisco's answer. The story travelled unusually wide on pickup day, running at Gigaom, TechCrunch, Re/code, The Register and Data Center Knowledge alongside Cisco's own channels.
First-order effects
- Metacloud's enterprise OpenStack customers and staff now sit inside Cisco, giving the Intercloud initiative an operating team where it previously had mostly architecture and partnerships.
- The undisclosed price keeps Cisco's OpenStack spend off the comparables table, but the strategic signal is explicit: Intercloud will run on OpenStack, and Cisco intends to own the operational layer.
Second-order effects
- Independent OpenStack service providers lose their most prominent acquirer-suitcase candidate and face a market where large infrastructure vendors increasingly absorb the specialist talent instead of partnering with them.
- Cisco gains a bundle to sell — networking gear plus a managed, inter-connected OpenStack cloud — pressuring rivals whose OpenStack offerings stop at software or support contracts.
Third-order effects
- If the pattern holds, open-source cloud platforms consolidate into the portfolios of hardware and networking vendors, trading community independence for enterprise-grade delivery — with the 2013 upgrade struggles suggesting customers may welcome the hand-holding even as they accept vendor lock-in around 'open' stacks.
- The acquisition fits a recurring Cisco playbook of buying capability rather than building it, pointing toward more specialist absorption as vendors race to assemble credible alternatives to the public-cloud giants.
The trend: Networking and infrastructure vendors are acquiring OpenStack operators to build federated multi-cloud alternatives to the hyperscalers, turning open-source cloud from a community project into a bundled enterprise product.