Cisco is expanding its long-standing relationship with Microsoft. It's a new effort to automate hybrid cloud service provisioning for service providers. 

Normally, when we say “service providers” and we don’t mean cloud providers like Amazon, we mean communications providers like Verizon. But in this case, we mean both.

We’re also referring to any business that sells computing capability, storage capacity and software services to its customers. 

If your business provides a service for your customers to, say, contact your support agents directly and share their troubles with products or other services, then by definition, you’re a service provider.

Congratulations: You, Verizon, Netflix and Amazon are in the same boat.

Tell Me Why 

Here’s what’s happened and why. Cisco already produces what it calls Application Centric Infrastructure (ACI).  Ostensibly, it’s a way to put a Cisco brand on the concept that the application you’re running in the cloud can alter the network that enables it to run there.  

Imagine if your own body, when performing a workout or doing heavy labor, could provision new blood vessels and capillaries to provide oxygen more rapidly to your muscles.  (Okay, to be perfectly honest, it can.)  The basic concept of SDN and of Cisco’s ACI branding of SDN is that the network adapts to the workload.

This is extremely important because, historically, networks and connectivity were the sort of thing sold only in bulk to communications companies.  

SDN lets it be sliced-and-diced into smaller quantities, to be sold to regular, everyday enterprises.  Sure, since Cisco is in the network products business, it expands the market for Cisco or so it hopes.

What Cisco cannot provide by itself is the computing system.  It's trying, though.  

Switching Things Up

Last year, as part of its ongoing realignment of its business (which may have begun during the Harding administration) Cisco began producing its own servers. The move is part of what it calls Unified Computing System.  

When Cisco first premiered UCS, the “C” stood for “communications.”  It could still stand for both:  

These servers replace the typical peripheral bus that connects processors and hard drives, with a network layer that’s more in Cisco’s bailiwick. So all the devices that comprise a server would reside on the same network.  (Naturally, Cisco came up with a brand name for this concept too: “Intercloud.”)

Enter Microsoft

Here’s where Microsoft enters the picture.

In a data center where the fabric connecting devices is actually a network rather than a bus, connecting the processor to the cloud for storage rather than a local SAN becomes a trivial extension.  

Microsoft has a very big cloud: Azure.  It also has management services for deploying applications on a cloud infrastructure, which Cisco lacks.

So yesterday’s extension of the Cisco plus Microsoft partnership lets Microsoft fill in a few more of these gaps.  Now the Windows Azure Pack, which enables hybrid cloud deployments, will incorporate Cisco’s services for letting applications determine the structure of the network at any one time.

Real World Payoff

The concept is like stretching or shrinking your cloud to fit your workload for any given moment.  What could this actually enable?

  1. A retailer or other customer-facing institution could deploy a live call center that works through mobile apps and Web browsers, creating a kind of 24/7 communications complex for addressing customers directly with multi-way videoconferencing.
  2. An educational institution, such as Kaplan University, University of Phoenix or any organization wanting to become competitive with them, could produce live webcasts of its entire curriculum, and then purchase only the cloud capacity it needs to stream courses to its students, on a purchase-as-you-go basis.
  3. A country badly needing to modernize its stock and commodities exchanges, and that has bureaus dispersed among many hard-to-reach cities, can deploy UCS servers on-premise even if they have to be installed in broom closets, can purchase the cloud capacity from Azure it needs to fill the gaps in its connectivity, and ensure even distribution of live transactions moment-to-moment.

Who's On First?

So would this kind of communications-as-you-go service be provided by Cisco or by Microsoft?  We posed this question to Microsoft yesterday.

According to Microsoft’s spokesperson, Microsoft is contributing the part of the partnership that handles the consumption of software through the cloud.  When customers subscribe to Cisco cloud services, they will be using Microsoft’s consumption model, so they will be billed by Microsoft.

Clients of the architectural and consulting services of both companies will be offered Cisco’s ACI model. Both companies will be jointly producing tools that utilize this model.  This way, Azure cloud customers who utilize SDN and communications become, effectively, cloud service provider partners.

That means customers put forth service-level agreements (SLAs), not only for the levels they expect from Microsoft and Cisco but the service levels they expect to provide for their own customers as well. 

“SLAs will be developed by the partners based on the needs and requirements of their customers and scenarios,” said the Microsoft spokesperson.

You are now entering a new world.  In this one, to address your customers worldwide and retain competitive advantage, you become a service provider the way the FCC thinks of “service” rather than the FTC: You’re a communications provider.