Top 10 Cloud Stories Of 2010

Cisco Systems said Tuesday it plans to acquire newScale by the end of July, the conclusion of its fiscal year. The San Mateo, Calif., company was founded in 1999 as a pioneer in IT service catalogs and self-provisioning portals for end users. Terms were not disclosed.

The move will give Cisco a larger claim to being a provider of cloud-computing equipment and services. In the past, it has claimed its Unified Computing System blade servers and networking fabric were products suitable for virtualizing the data center. But more recently, more firms have announced they are converting the virtualized portion of their data centers into pooled resources functioning more like public clouds.

Both VMware and Citrix Systems offer self-provisioning of users of their virtual machines through vCenter and Lab Manager products. Several cloud startups, including Eucalyptus Systems and Nimbula, offer self-provisioning portals as part of their private cloud software line-ups.

"With the acquisition of newScale, Cisco will be able to accelerate the deployment of cloud services through a service catalog and self-service portal that allows customers to easily manage their IT infrastructures," Parvesh Sethi, senior VP of Cisco Services, said in a statement.

"Cloud computing represents a major shift in the evolution of the Internet, and as more customers migrate from traditional IT infrastructures, the need for rapid self-provisioning and efficient management become increasingly critical," he said.

While virtualization vendors tend to start with a cluster of virtualized servers as the private cloud platform, Cisco starts with a network focus. Eighteen months ago, it ventured into the blade server business with an ability to offer servers packed with random access memory and connected to its network fabric. Such servers could host more virtual machines than those equipped with more typical amounts of memory and network connections, it said at the time it launched its Unified Computing System.

Part of the design of its networking fabric is meant to offload converged networking traffic making its way through a hypervisor's software switch to its network fabric, where hardware devices take over and route the traffic to either storage or the Ethernet LAN, depending on its proper destination.

NewScale's products will add to its high-volume server and networking fabric by allowing end users to commission virtual machines on their own as needed, with the server I/O on which they're running less likely to run into bottlenecks, the company said. Self-provisioning is also aided by the existence of a service catalog that allows end users to pick applications and services they need to run on their virtual machines.

When the acquisition is completed, newScale staffers will become part of Cisco's advanced services organization. "NewScale has a front seat for the transformation of enterprise IT and adoption of private clouds," Scott Hammond, president and CEO, said in a statement. He pointed to rapid revenue and customer growth in 2010 when he issued an assessment of his firm's fiscal performance on Jan. 5.

Customer deployments grew by 162% in 2010 over the year before, and software license revenues increased 312% as customers initiated more serious implementations of private clouds.

"Momentum is accelerating as we start 2011," Hammond claimed at the time.

NewScale also quoted customer SHI International's chief technologist, Henry Fastert: "Cloud computing is an important new requirement for our customers, and SHI is opening a $25 million cloud services data center in 2011 to meet that need. We chose newScale to provide the self-service and automation required."

Cloud service catalogs are one place for presenting virtual machine templates, where self-provisioning users are given a list of choices of pre-determined server configurations. The servers have already been given networking and storage resources based on their size and expected rate of use. Self-provisioning is also accompanied by user tracking and chargeback, so that departments and business units pay on a per-use basis. The practice tends to act as a check on the inclination of end users to over-provision resources for particular departments.

In addition to technology and personnel, Cisco wanted newScale in part for its existing customer base, which includes: Ameriprise Financial, Bechtel Corporation, Boeing, Bosch Group, Cable&Wireless Worldwide, Capital BlueCross, Charles Schwab, Citizens Financial Group, Citrix Systems, Environmental Protection Agency, Federal Reserve, Gap, Intel, Kimberly-Clark, Los Angeles County Government, Macy's, National Aeronautics and Space Administration (NASA), Nokia, PJM, Saab Group, Sasol, SHI International, Siemens IT Solutions & Services, U.S. Army Corps of Engineers, Washington D.C. City Government, and XL Group.