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Cisco Gets Serious About Cloud Computing

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Will start-ups ever again have to purchase network hardware in order to do business? A few years ago that question would have been silly. No longer. Thanks to the rise of increasingly vibrant cloud computing platforms, start-ups can get most of what they need through a few commodity servers, PCs, and Web browsers.

And Cisco Systems (Nasdaq: CSCO  ) , which you'd think wouldn't be OK with that, is. The market's leading seller of data networking equipment recently submitted a proposal for Networking as a Service (NaaS) to the OpenStack open-source cloud computing project.

Championed by Rackspace Hosting (NYSE: RAX  ) , OpenStack is a collection of open-source software tools and protocols for transforming a collection of Web-connected servers and storage devices into a functioning infrastructure for hosting business software.

Cisco's contribution suggests ways to effectively define and share resources over a virtual network -- i.e., a network defined in software rather than through hardwired collections of servers, switches, and routers.

Having Cisco participate is a huge win for OpenStack. As CNET's Dave Rosenberg points out here, the project has long lacked a serious set of data networking tools. Should its NaaS proposal meet with the approval of the wider OpenStack membership, it could elevate the platform and put pressure on closely held alternatives, such as VMware's (NYSE: VMW  ) newly released Cloud Foundry and Microsoft's (Nasdaq: MSFT  ) Azure.

Do you agree? Disagree? Tell us what you think about OpenStack and its alternatives using the comments box below. You can also rate Cisco in Motley Fool CAPS.

The Motley Fool recently introduced a free My Watchlist feature that allows users to stay ahead of the curve and receive up to date news on companies like Cisco, or any of its competitors. Add the company to your watchlist today:

Microsoft is a Motley Fool Inside Value pick. Rackspace Hosting and VMware are Motley Fool Rule Breakers recommendations. Motley Fool Options has recommended members create a diagonal call position in Microsoft. Motley Fool Alpha LLC owns shares of Cisco and Microsoft. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He owned shares of Apple and Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool owns shares of Microsoft and is also on Twitter as @TheMotleyFool. Its disclosure policy is tired of cloudy days. Hello, spring? Are you there?

Read/Post Comments (2) | Recommend This Article (2)

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  • Report this Comment On April 13, 2011, at 3:55 PM, andresmitchell wrote:

    I think OpenStack sounds like a viable theory and I would say that the Rackspace endorsement is more important than Cisco's. Rackspace is a cutting-edge, forward thinking, nimble company. Cisco is a poorly managed, un-visionary, bloated, declining, misguided, (did I mention poorly managed?), company which has missed every transition in its end markets and now sells commoditized products that are too expensive and that nobody wants. Their model doesn't work in the new, decentralized network model. So yes. the Rackspace endorsement is relevant. Cisco's opinion and especially those of its CEO can be disregarded as they, like he, lack any credibility.

  • Report this Comment On April 14, 2011, at 11:20 AM, David369 wrote:

    If Cisco isn't careful they will be the next KODAK. Looks like they might be getting the idea their boat is getting smaller.

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