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SP360: Service Provider

By Uwe Lambrette, Director of Service Provider Solutions, Cisco Internet Business Solutions Group (IBSG)

Cisco IBSG’s recent interviews with about 45 enterprise CIOs and architects clearly revealed that enterprises have a preference for private cloud. They want to maintain control over their IT, especially where the architecture is new and skills need to be built. In addition, they are not comfortable with accepting externally provided cloud solutions (although there are certainly exceptions).

At the same time, the survey indicated that once enterprises have gained private-cloud experience, they are more willing to allocate this architecture to an external provider.

This is reminiscent of the classic outsourcing
 cycle, where corporate functions are moved externally once they have become a commodity.

This trend has significant implications for cloud providers: their primary competition will 
often be internal IT delivery, not another cloud provider, and they must address migration of workloads
 and hybrid solutions. Often, an entry product should help the 
enterprise build an internal solution — either through advisory services, or through managed infrastructure blocks that can be deployed in the enterprise. Further, this highlights a need to rethink hybrid cloud, which must allow the enterprise to have orchestration control. This represents a change in philosophy for service providers who are used to 
controlling and orchestrating all infrastructure themselves.

Because of this, service providers are often relegated to a supporting function in the enterprise. In addition, enterprises often do not seem to “buy” the promise of integration of network
 and IT.

At the same time, service providers are in demand as full solution providers (including the network) for the commercial sector, where companies typically have revenues of less than US$10 billion and about 1,000-4,000 employees. In this case, however, it is not sufficient just to provide the infrastructure solution: these customers expect a complete and managed stack, including application and professional services that aid deployment and operation of the solution, as well as its integration with on-premise IT.

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