Cisco Plans To Acquire Metacloud As OpenStack Cements Its Position As Standard For Enterprise IaaS

On Thursday, Cisco announced plans to acquire Metacloud, the provider of OpenStack-based on premise private clouds hosted either at a customer’s datacenter, or at one of Metacloud’s five global datacenters. Metacloud also offers hybrid cloud options based on a combination of its hosted and private cloud offerings. Cisco’s acquisition of Metacloud’s private cloud as a service strengthens its ability to execute its Intercloud strategy of building one of the world’s largest networks of cloud platforms. As noted in Cisco’s press release announcing the acquisition, given an IaaS landscape with “OpenStack gaining global acceptance through its ability to handle any workload on any hypervisor on any public or private cloud,” OpenStack constitutes a key component of Cisco’s Intercloud strategy. Cisco’s acquisition of Metacloud builds on its promise from March 2013 to invest $1B in the cloud and illustrates a growing trend whereby large technology companies are starting to acquire nimble cloud startups as evinced by HP’s recent acquisition of Eucalyptus. The bottom line here is that private and hybrid cloud services are increasingly indispensable for any technology company and that the allure of OpenStack as an interoperable IaaS technology platform is gradually achieving fruition. The acquisition of a commercial OpenStack vendor represents the safest bet for a large tech or telco interested in augmenting its portfolio of cloud products and services in contrast to the huge capital investment required to build a proprietary IaaS platform. All this means that OpenStack startups can expect their valuations to soar as large tech companies seek to cash in on cloud products and services before the market becomes saturated with an embarrassment of IaaS riches. As a result of the acquisition, Metacloud employees will become part of Faiyaz Shahpurwala’s team as Cisco’s SVP of Cloud Infrastructure and Managed Services. The acquisition is intended to close in the first quarter of the fiscal year 2015.

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