Cisco and Amazon partner on hybrid-cloud approach
Cisco Systems Inc. is teaming up with Amazon.com Inc. to offer cloud-computing customers a hybrid-cloud solution that allows them to keep sensitive data and applications off remote servers.
Cisco CSCO, +0.61% and Amazon AMZN, +0.77% announced the partnership Thursday morning, which will combine Cisco’s software and potentially hardware with AWS cloud-computing power. The system will use Kubernetes, open-source containerization software that allows for applications and data to be grouped together and maintained on different sources.
In a telephone interview ahead of the announcement, Cisco’s networking and security chief praised what he called the “world’s first native hybrid Kubernetes environment for AWS.” He said that customers of AWS and Cisco would now have access to Cisco Container Platform software to manage workloads on and off Amazon’s cloud, with the option to buy Cisco’s hyperconvergence hardware to help with the task.
”I see most customers going with an integrated hardware/software system,” Goeckler said. “Most customers want it simple — gimme the hyperconverged server that has all the software bundled together … [for] a ready-made hybrid environment into Amazon.”
Hybrid cloud has been a focus of enterprise-tech giants the past couple of years — Part of Cisco’s offering in this field comes from a 2017 acquisition — but the competition has reached a new intensity of late. International Business Machines’ IBM, +0.11% proposed $34 billion merger with Red Hat Inc.RHT, -0.33% last month showed that legacy tech businesses are fighting for a part of what is expected to be the most common approach to business computing.
See also: The lesson of IBM’s move for Red Hat is that open-source has truly arrived
“Hybrid cloud workloads today represents 30% of all enterprise deployments and is on an aggressive trajectory to hit 55% by 2022 as more companies and governments move to the cloud in this transformational secular shift,” Wedbush analysts wrote in response to the IBM-Red Hat deal.
Cisco also has partnerships with other major cloud providers like Microsoft Corp. MSFT, -0.38% and Alphabet Inc.’s GOOGL, -1.49%GOOG, -1.31% Google Cloud. AWS is the unquestioned leader in cloud-computing, though, and had been reported to be looking into selling and maintaining its own equipment that would have put it in more direct competition with Cisco.
“More customers run containers on AWS than anywhere else and the majority of companies use AWS to run Kubernetes,” Amazon Web Services exec Terry Wise said in a Cisco release. “Our customers want solutions that are designed for the cloud and Cisco’s integration with Amazon EKS will make it easier for them to rapidly deploy and run containerized applications across both Cisco-based on-premises environments and the AWS cloud.”
The hybrid-cloud partnership will launch in December, with Cisco’s software-only subscriptions starting at $65,000 a year and contracts offered in lengths of one, three and five years. There are also fees for creating Amazon EKS clusters and the computing power necessary to run on the AWS cloud.
Cisco stock was up 0.4% in Thursday trade and has gained 25.5% so far this year.
Amazon shares are down 1.5%, but continue to have gains of about 48% for 2018 despite recent weakness in response to the company’s third-quarter earnings report; Cisco is set to report earnings on Nov. 13. The S&P 500 index SPX, -0.25% has gained 5% so far this year.
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