Cisco Kills Its $1 Billion Cloud

Cisco has confirmed that it is killing its $1 billion cloud project known as “Intercloud,” as The Reg’s Simon Sharwood reported.

A spokesperson confirmed to Venture Beat that the public Intercloud will be shuttered in March 2017 and Cisco will move enterprises apps and data elsewhere including to another, unnamed public cloud provider.

While Cisco isn’t saying the name of that cloud provider, there’s a good chance that it’s Amazon because enterprises are tripping over themselves to use Amazon these days. Amazon has got more features and more partners than any other cloud provider out there.

Cisco launched The Intercloud in 2014, promising to spend $1 billion on it. It was launched in response to the growing threat of Amazon, which is increasingly sucking up the apps, data and IT budgets of many big enterprise customers.

Meanwhile, the cloud providers like Amazon, Microsoft, and Google aren’t using a lot of Cisco gear. They are increasingly using a new style to build networks that relies more on software and less on high-end, expensive hardware. Some of them, like Amazon, Microsoft and Google are even building their own network hardware altogether. (Meanwhile Facebook has been madly inventing whole new kinds of network hardware suitable for big cloud providers and giving the designs away to everyone for free.)

So score another body bag win for the unstoppable Amazon Web Services. Its runaway success has claimed a number of victims since last year. For instance, in 2015, HP shuttered its public cloud and helped its customers move to Amazon and then signed a bigger partnership deal to help them use Microsoft Azure.

The Naked And The Dead

Rackspace threw in the towel and instead became an Amazon (and Microsoft) cloud partner, offering customer support on those clouds. (In industry jargon, it sells a “managed service.”)

Earlier this year Rackspace exited the public stock market and sold itself to private-equity firm Apollo Global.

(And Amazon just struck at Rackspace again, by launching its own managed service early last week.)

Then, major holdout VMware conceded defeat and signed up to become an Amazon partner, too.

VMware was attempting to do a similar thing as Cisco. It has its own cloud software and was trying to get a bunch of smaller hosting providers to become a big network of public cloud providers. But its customers wanted to use Amazon’s top shelf cloud. VMware either had to make its products work better with Amazon or risk losing customers altogether.

Some also lay EMC’s demise at Amazon’s feet as well. Amazon offers a less-expensive way for companies to store lots of data, so they don’t need to buy as much storage hardware anymore. Dell acquired EMC in a $67 billion deal earlier this year.

Cisco emailed Business Insider the following statement in response to the report:

“Cisco has internally communicated that we are discontinuing one of our internal cloud platforms and will be transitioning affected workloads onto other platforms. We do not expect any material customer issues as a result of this transition. For the last several months we have been evolving our cloud strategy and our service provider partners are aware of this.

Cisco continually re-evaluates its technology strategy as customers’ needs evolve. The cloud market has shifted considerably in the last two years, and many of our customers are asking Cisco to help them develop cloud strategies that will help drive their digital transformations. With the global availability of cloud offerings, the trend toward rapid application development with microservices, and the ability to orchestrate workloads across private and public clouds, Cisco has evolved its cloud strategy from federating clouds to helping customers build and manage hybrid IT environments. Our cloud strategy centres on building and delivering secure hybrid cloud infrastructure, platforms, and services — with our partners — that offer customers the freedom to choose the best environments and consumption models for their traditional and new cloud-native applications.”

Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.

This article originally appeared on Business Insider Australia

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