Cisco Intercloud Poster Child Pledges Allegiance To Rival AWS-Ericsson Cloud

Telstra, the Melbourne, Australia-based service provider considered the flagship partner for Cisco's Intercloud initiative when it was launched two years ago, is now making a different bet with rival Amazon Web Services and Cisco telecom giant partner Ericsson.

Cisco's Intercloud strategy is now facing some heavy competition from Ericsson and AWS, whose new strategic cloud partnership, formed in February, has won over Telstra.

"Telstra was sort of the flagship vendor for Intercloud," said Patrick Filkins, a telecom and network analyst at Technology Business Research (TBR). "Well, Telstra is now working with Ericsson to do the exact same thing with AWS now. So there's certainly some turmoil there."

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Telstra's decision to work with AWS comes just one year after Cisco boasted that its Intercloud bundle is upwards of 40 percent cheaper for heavy public cloud users that AWS' service.

Telstra did not respond to CRN's multiple requests for comment by publication time. Cisco also declined to comment on the matter.

Channel partners said Telstra's decision to work with Ericsson and AWS shows that Cisco needs to clearly spell out the road map and future direction for Intercloud.

"You're seeing others now coming into the game," said Robert Keblusek, chief technology officer of Downers Grove, Ill.-based Sentinel Technologies, a Cisco partner and a Cisco-powered cloud provider. "So yes, the [Ericsson-AWS] partnership could be competition to Cisco. … Cisco does need to continue to clarify and continue to refine their approach with Intercloud."

Telstra will be hosting a joint cloud innovation center in its hometown with Ericsson that will bring together cloud experts from Telstra, Ericsson and AWS to develop new business opportunities and accelerate cloud adoption, said Telstra Chief Technology Officer Vish Nandlall in a statement.

"Telstra's vision is to build a trusted network service for mission critical cloud data, and we are excited to explore the opportunity of bringing this vision to life with Ericsson and AWS," said Nandlall in the statement.

Ericsson formed a partnership with AWS through which the two companies are developing solutions to accelerate cloud transformation for telecom service providers. The new technology is seeking to create portability between Ericsson's telecom customers' infrastructure and AWS' data centers.

Cisco unveiled Intercloud in 2014, looking to connect fragmented, custom-built clouds through open APIs. The networking giant built a policy-based architecture, Intercloud Fabric, which connects the clouds so workloads can be moved back and forth easily.

"When you look closely at this partnership, they kind of do the exact same thing Cisco is doing or very similar -- they're connecting service providers to AWS' cloud," said TBR analyst Filkins. "They're saying, 'If you're not going to Cisco's cloud, why don't you just come with us? We'll facilitate portability and connection with AWS' cloud.' So you already have a competing interest there."

Cisco and Ericsson together made headlines in November when they announced a partnership by which the two companies will team up on joint development centered on next-generation service provider networks and new platforms and services around the Internet of Things.

In a statement to CRN, an Ericsson spokesperson said, "Ericsson and Cisco are fully committed to the strategic partnership and we continue to compete in areas where we have competing offerings." Ericsson said it has "not discussed Intercloud" with Cisco.

Ericsson is also providing software designed to help telecoms tap into AWS' cloud services by working to build solutions around workload management across on-premise infrastructure to the AWS cloud as well as end-to-end security and data traffic management.

"That proprietary cloud connection activity that's going on with Ericsson and AWS would be a threat to Cisco," said one top executive from a solution provider and Cisco Gold partner, who declined to be named.

Cisco launched Intercloud in 2014 through a series of partnerships with telecom operators, including Telstra, which was Cisco's first Intercloud partner. Telstra is now working with Swedish telecommunications giant Ericsson and AWS on their new cloud strategy, which channel partners and analysts said is similar Intercloud.

Partners say Cisco has started to pivot away from talking about Intercloud and its strategy for the time being.

"In my conversations that I'm having with Cisco data center guys, it's very quickly pivoted away from Intercloud and Intercloud strategy," said the executive. "They're not talking about it."

Cisco CEO Chuck Robbins has been mum about Intercloud since taking over the helm in July. Robbins did address the matter when asked by the media during Cisco Partner Summit 2016 in San Diego in March.

"While you haven't heard me say, 'Intercloud, Intercloud, Intercloud,' … the underlying strategies in my view haven't fundamentally changed," said Robbins at the time. He said the key pillars of Intercloud, although all in various stages, are still on track.

Sentinel's Keblusek said the fact that giants like AWS and Ericsson are jumping into the space validates that Cisco knew "very early on" that there was a need for Intercloud and "others are now jumping on, because it's a challenge out in the market."

"All the providers are looking at how they take advantage now of this workload mobility when customers want to run a workload in various clouds," said Keblusek. "It's not going to be a world of one cloud, necessarily -- it's kind of world of many clouds, and people want to be able to move workloads between various clouds. … Everybody [is] trying to figure out some way to make workloads move."