They say the cloud is expensive and it looks like not even Cisco is able to break into this market. Joining HPE with Helion, Cisco is shutting down its cloud service that it has invested $1 billion into known as Intercloud.
For its part, Cisco says that it will be shifting its apps and data to another unnamed cloud provider as part of shutting down its operations. Considering that Microsoft and Amazon are the two leaders in this segment, it seems likely one of those platforms will be chosen; Cisco has not stated when or if they will make public which service they select.
Intercloud, which was launched in 2014, was built in response to the growing threat of AWS and Azure, both services have prospered the past few years while competitors have struggled to compete. This is partially because Amazon and Microsoft are investing billions into these platforms with Microsoft saying at one point each data center was costing them a billion dollars. What this means is that for any new incumbent to be relevant, they need a near bottom-less checkbook to build out the infrastructure.
Cisco confirmed to Venture Beat today that they are shutting down their service in March of 2017.
With Microsoft, Amazon, Google, and even Facebook building their own hardware and software for networking and infrastructure, Cisco has found itself as a legacy provider and is looking for new ways to stay relevant as fewer companies buy its hardware. The being said, Cisco looked to build out a cloud to find its own way into the future of the corporate datacenter but that story ends in March of 2017.
While this is seemingly good for Amazon and Microsoft, it’s not so great for the industry. Having fewer companies competing means less downward pressure on pricing; although Amazon and Microsoft do seem to be in a race to the bottom.