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Blogs > Banks Statement

Cisco-Parallels deal the mark of something bigger
Martin Banks By: Martin Banks, Proprietor, Lian-James Consultancy
Published: 28th January 2013
Copyright Lian-James Consultancy © 2013

Interesting trends are building up around cloud service software provider, Parallels, just ahead of the company’s major annual bash, the Parallels Summit, being held next week in Las Vegas.

The prime one is the news that Cisco has bought a small, 1% stake in Parallels. This has raised a goodly number of questions about Cisco’s intentions. Most seem to see it as in some way aggressive, both against VMware, particularly in the desktop virtualisation market, and against Microsoft and, in particular, its 365 cloud efforts. I would beg to offer a different thought, however.

Back in October, at the Citrix Synergy conference in Barcelona, one of the main keynote speakers was Cisco Chief Technology and Strategy Officer, Padmasree Warrior. She was present because Cisco and Citrix were announcing a new and significant partnership. It was significant because, as I wrote at the time, Warrior was one of the first executives from a major IT vendor to acknowledge that we live in a world of many clouds.

This is part of what she said at the time.

“We see a future of IT changing fast. By 2015 we expect to see 50 times more traffic through smartphones than now, with some 10 billion mobile devices, and more than half of all IT delivered via the cloud. And there will be a need for cloud orchestration for a world of many clouds.

“So we aim to bring together Cisco Unified Computing System, Cisco ONE components and Nexus switches, with Citrix CloudPlatform, Apache CloudStack and Citrix XenServer. The goal is to simplify cloud management and remove the current complexity.”

And now Cisco is not just partnering with Parallels, but actually taking a small stake, which also gives it a seat on the Parallels board. This can certainly be interpreted as a move with some aggressive intentions, but it is also possible to see it as a defensive move. It can be seen as a move that makes buying relevant Cisco hardware and services—as part of a wider investment in cloud infrastructure—as a sensible, decerebralised option.

For Cisco’s end users, be they Cloud Service Providers (CSPs) or major enterprises building private or hybrid cloud infrastructures of their own, the question needs to be is there a good reason to consider suppliers or technologies that are outside the collection of partners working with our prime target service provider? If the partners have all chosen well, and are doing their jobs properly, the answer really should be 'no' in the majority of cases.

Cisco is making its own pitch at being the provider of the 'one and only' cloud architecture that any business needs, as is every other technology provider working in the cloud marketplace, including Parallels. But it is never going to be that way—and neither should it. After all, one of the key underlying arguments in favour of using cloud is to reduce—and ideally break clear of—technology lock-ins. Simply swapping one lock-in for another is hardly progress.

So partnering across as many stacks as possible gives Cisco the best position. It has a long-standing partnership with VMware, plus its own implementation of OpenStack. It now has its partnership with Citrix, which gives it a route through to users of the related CloudStack technologies.

Parallels brings three important additions to this mix. One is access to Microsoft, the second is access to another option on desktop virtualisation, and the third is a strong and growing penetration into an important channel component now becoming the main route to end users of all types—the CSPs.

The Microsoft connection is arguably a crucial hole in Cisco’s strategy till now. The two companies used to be close partners but became estranged when Microsoft, casting round for alternative lines of development, started to try and eat its partner’s lunch with steps like the acquisition of Skype. But with its cloud efforts such as 365 and Azure Microsoft now offers real potential, both in the market and to partners.

And from what Warrior said in Barcelona, it would appear that Cisco is smart enough to realise that all the cloud technologies in the world are worth zero if there is not some justification for using it all that is of real value for the end users. The reason Microsoft got into the cloud was it realised that online was not just the new applications software delivery method, but also an increasingly important option for consuming what the applications provide.

Cisco, I feel, understands that while it has much of the technology needed, it now needs to play ever more closely with those that provide the reason for using cloud. That is why it was a featured partner at Oracle’s OpenWorld in San Francisco last October, despite Oracle following Microsoft’s tactic of trying to eat Cisco’s lunch with moves like the acquisition of software-defined networking start upo, Xsigo, back in July.

And Parallels is particularly close to Microsoft. The majority of its senior management are ex-Redmond people, and it could easily be seen by its large CSP channel partner community as the personification of Microsoft here on earth. Parallels provides Cisco with a route through to users and deliverers of the applications which are still the mainstay of the majority of business users around the world, just as those users really start to move cloudwards.

When it comes to desktop virtualisation Cisco already has its VMware relationship, and now also one with Citrix. But Parallels plays here too and, perhaps more to the point Warrior made, the new trend is very much towards mobile. Parallels not only has its own mobile app tools, but also those of Microsoft.

Windows 8, with its commonality across platforms from mobiles to the largest workstations, and all stations in between, is Microsoft’s best shot yet at really breaking through into the mobile sector. This is particularly so in the corporate and business user markets, just as the BYOD movement gains a real head of steam. And let’s not forget that Cisco has some security capabilities here that may prove to be a useful offering in return.

This does also raise the question as to whether desktop virtualisation per se is about to become rather 'so last year, dahlink'.

The channel component which Parallels brings cannot be ignored. It has a large and growing cohort of CSPs around the world that all build on Parallels’ cloud services management platform. These are the businesses that end users now interface with directly. Many of them will, in one way or another, become the brand names their marketplaces come to trust and turn to first.

This is where IT is at last following where many other businesses have trodden before. For example, one may buy a Vauxhall car, but the components that go to make it up come from all over, including companies that most would assume are direct rivals of Vauxhall. And the end users don’t care. They don’t care which company made the piston rings—they just expect them to keep working.

And so it is becoming with IT, and no one will care what components Cisco provided in a cloud delivery service. In time, most will not even have heard of the company. So finding routes into the heart of that delivery system is essential, and exactly what Cisco seems to be attempting now with this recent spate of moves.

As a final thought, Parallels has one other card up its sleeve, though for a few years in showed every sign of forgetting about it. This is APS, the Application Packaging Standard, a toolset that provides a way of packaging up applications with all the elements needed to be rolled out to CSPs, installed, and implemented by them on a click-of-a-mouse basis. In practice, of course, this really just means applications running on Microsoft servers and OS.

APS was launched a good few years ago, but for reasons that never became quite clear (though probably included fighting its corner in the battle for R&D funding) development stalled. Version 2 is expected to be revealed at the Summit next week, though back at the Summit in early 2010, this version was said to be coming out by the end of that year.

The delay notwithstanding, this tool could play a part in Cisco’s thinking. Its Citrix partnership gives it a route through to CloudStack, and it has its own implementation of OpenStack, both of which offer as a side capability a way of porting applications and services between different CSPs that use the same base environment.

This is an important capability, not least because many potential users see the cloud as a particularly dubious technology lock-in—one where they don’t even have the application on-premise to keep themselves working at least in the short-term. These capabilities can serve to at least reduce fear that the cloud means leaving delicate parts of the corporate anatomy firmly in the hands of third parties.

The following thought is purely speculative, but having the use of APS, CloudStack and OpenStack could put Cisco into a strong position, one where it is able to offer the user community a service which might be termed something like 'Intermediary Central', the ultimate service broker.

It could certainly put it in a position where it consider claiming to offer the 'cloud of clouds'.

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Published by: IT Analysis Communications Ltd.
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