Cisco is launching OpenStack Private Cloud, a hardware and software bundle that it says is 30 percent cheaper than Amazon Web Services and provides an on-premises equivalent.
OpenStack Private Cloud is based on technology from Metacloud, which it acquired in September 2014. Like Cisco's Meraki wi-fi solution, this solution is engineered, deployed and remotely operated by Cisco, with policies pushed down the tin remotely, simplifying installation and operation for reseller and customer.
The private cloud bundle is being pitched as a lower cost option for companies running production workloads on AWS. According to Cisco, this on-premise gear boasts the same benefits as the AWS cloud, such as high availability, an enhanced dashboard and full support of both OpenStack APIs and Amazon Web Services APIs.
With OpenStack Private Cloud, Cisco promises to help customers avoid the risk of "sticker shock" from unexpected fees; in terms of security, Cisco stressed that the bundle "delivers a true public cloud experience for users on your premises and behind your firewall".
At its Partner Summit in Montreal, Cisco showcased a "medium-sized" bundle combined two Cisco ASR 1000 routers, two Nexus 9000s switches and three UCS servers boxes, running 1,000 virtual machines plus the subscription to manage it.
Edison Perez, senior vice president, cloud and managed services partner organisation at Cisco, said this configuration would be 30 percent cheaper than "an alternative solution on AWS".
This comprised $250,000 worth of hardware, plus another $250,000 worth of compute and storage capacity, worth another $250,000. The reseller would get a 10 percent margin on the $500,000 sale, plus earn a 20 percent ongoing subscription margin for the management of the private cloud.
Cisco remotely manages the orchestration, automation and security, but this service is white-labelled, as if the reseller was providing it. Cisco found that customers tend to increase their virtual machines by about 10 percent each month, which in turn boosted subscription revenues.
Scott Sanchez, who was vice-president of strategy at Metacloud and is now a director at Cisco, said the technology allowed users to "control their environment and reduce their cost by 30 percent over Amazon and give the exact same experience to the developers: a modern cloud using OpenStack".
He pointed to one example, Tapjoy, which serves advertisements to mobile applications. The company had been running most of its VMs in Amazon and the rest in SoftLayer. Tapjoy realised it could save money by moving to a private cloud, and migrated all of its "steady state" workloads to Metacloud, hosted on infrastructure in Equinix, leaving just the "super spiky" ad-serving application at AWS, said Sanchez.
"That's a great model, because you own the base workload, you rent the spike, and they reduced their costs," added Sanchez.
By arguing its solution is cheaper than AWS, Cisco is wading into well-trodden territory – trying to convince customers of the cost benefits of one computing platform with another.
AWS, for instance, offers a Total Cost of Ownership calculator that it has used as evidence that its cloud is cheaper than VMware.
VMware claims its rival is "stacking the deck" and last year released data from benchmarking tests it had commissioned showing vCloud Air was 35 percent cheaper than Microsoft Azure compute, and only a sixth of the cost of AWS storage.
It's rarely that easy though, with the complex configuration involved making apples with apples comparisons difficult.
Cloud journey for channel
In Montreal, Cisco Australia managing director Ken Boal outlined how technology shown at Cisco Partner Summit could provide a clear pathway for small to medium sized resellers to take customers to the cloud.
He suggested resellers start with Cisco's newly launched cloud consumption tool, which helps customers monitor and assess cloud consumption and detect instances of "shadow IT" within their organisation.
If data from this report shows the customer is paying for inappropriate or unnecessary cloud services, or exposing themselves to security risks, the reseller could steer the customer toward the Cisco OpenStack Private Cloud, more traditional on-premise infrastructure such as Cisco USC servers or converged infrastructure from VCE, FlexPod or VersaStack, Cisco's partnership with IBM.
Steven Kiernan is a guest of Cisco in Montreal.
-1.jpg&w=100&c=1&s=0)
.png&w=100&c=1&s=0)
