Cisco Systems planning $1 billion cloud-services push

Eager to expand its business beyond routers, switches and other computer hardware, Cisco Systems on Monday announced a plan to spend $1 billion over the next two years to bolster it’s so-called cloud, or Internet-based, services.

The San Jose communications and networking company said its cloud services will be tailored to the growing array of household, industrial and other gadgets that are being computerized and linked together as part of the “Internet of Things.”

Cisco is making the move because “Hewlett-Packard, IBM, VMware and others have aggressively rolled out their own cloud services, placing Cisco at a disadvantage in supporting the needs of its customers,” said Cantor Fitzgerald analyst Brian White in a note to his clients.

And although $1 billion sounds like a lot of money, Richard Kugele, an analyst with Needham & Co., added, “we don’t believe that $500 million in incremental annual spending will dramatically change the competitive landscape,” because so many other companies also are pumping money into the cloud.

 

 

Photo by Paul Sakuma, AP

 

Steve Johnson Steve Johnson (264 Posts)

Steve Johnson covers the microchip industry, cyber security and the big-technology sector that includes Hewlett-Packard, Oracle and Cisco Systems.