Cisco's Lloyd Talks Intercloud, Reorg, And CEO Succession Plans

As Cisco moves full speed ahead with its Intercloud strategy, Cisco President of Sales and Development Rob Lloyd recently shared with CRN how he sees partners playing a role. The 20-year Cisco vet also detailed a recent reorganization within Cisco's engineering unit, why Cisco will remain partner-centric even after CEO John Chambers retires, and how he feels about partners widely considering him a potential successor to Chambers himself.

CRN: Some partners still aren't clear on the margin opportunities with Intercloud. What can solution providers expect?

Lloyd: The market we are addressing with Intercloud is hybrid. The vast majority of the market that we will capitalize will be private and managed services for enterprise, business and government customers, combined with a series of new network-centric cloud services that will come from the cloud.

Some markets will move more to consuming pure cloud services, others will move more slowly. I have been on a call since early this morning with a European customer, and we have to recognize that the market will move around the world in different speeds and in different ways. It will be different by industry, it will be different by country. And so the vast majority of Intercloud opportunities will be consumed in the private and managed services, which is the business of our partners. They will be providing on-ramps into these new Intercloud capabilities that I think service providers are naturally equipped to provide.

But no matter which data you look at, the fastest-growing part of this marketplace is hybrid cloud, growing at 40 percent a year vs. public cloud services growing at 17 [percent], expected to grow for that same five-year period of time.

So our partners -- the partners we have worked so hard on with our data center portfolio, with our collaboration portfolio, with our security portfolio -- will simply be providing new ways for our customers to consume some of that offer and that will come from Intercloud-based public or managed services. But, quite frankly, we want them to do more of what they are doing and accelerate other successes we are having with private and managed services. And that is their business.

CRN: How do Cisco Powered cloud partners fit into the Intercloud strategy?

Lloyd: One of the reasons we asked [the head of Cisco's new Cloud and Managed Services Organization] Edison [Peres] to lead the development of the partner element for Intercloud is because that's been a very, very key focus for us. I'm not sure if we have fully announced those directions, but we are having the conversations right now as to how we will embrace and connect the Cisco Powered offers, how people with Cisco Powered offers in the marketplace can evolve those to an Intercloud offer, which fundamentally have some foundational building blocks that we think are part of the Intercloud differentiation, including embracing ACI or APIC Controller, including embracing OpenStack orchestration and a common services catalog. … I believe Edison is working on a program that will allow existing Cisco Powered providers to connect with Intercloud or allow their services to become Intercloud-certified. And that conversation is going very well.

NEXT: The Competitive Landscape For Intercloud

CRN: Talk the competitive landscape for Intercloud and how Cisco plans to differentiate.

Lloyd: I would always start with the customer. And the customers that I talk to in enterprise, government and small and medium business thoroughly believe that they will want to offer a choice of capabilities to the business that they support. There is no doubt in anybody's mind, including ours, that in some cases a public cloud service is the right offer for them to be able to enable flexibility in their business model and to get things done very quickly and in a very efficient cost structure. That is often a conversation that is being had with the line of business. The one thing we have discovered … is that in many cases the CIOs are not aware of how many small, fragmented parts of the organizations are using different cloud services -- not just public, but hosted or SaaS offers. They think that they are using Salesforce and WebEx, but when they actually do discovery they find they are using many, many more. And I think the whole conversation that's going on with customers right now is how does the CIO create the lowest-cost environment that is compliant with regulations, which are different by country -- especially privacy and data sovereignty regulations that are very important. And the answer is that today's model isn't going to allow them to do that.

Today's model is business reaches out, uses a SaaS platform and then someone goes out independently. And the Intercloud fabric and some of the capabilities that we are bringing does give the customer the ability to leverage the best of those deployment models but still remain compliant, follow policies and keep the CEO and the CFO compliant with the obligations they make when they sign off on the company's performance. And, quite frankly, today's environment doesn't allow customers to do that because there is a very fragmented use of technology that, in many ways, are not compliant with the policies that the companies have signed up to. So we are helping, with the services team, to build out some of these capabilities to assist the CIO and become a broker of these services to the business. That's one thing that's very different.

CRN: What else in your opinion really makes Intercloud a market game-changer?

Lloyd: The second thing is everybody wants an agile, low-cost, cloud-based platform with a nice PaaS model on it and ability to deploy applications more quickly. But the customers that we talk to, a lot of them want that in their data centers or managed specifically for them on an instance for their environment. And if you talk to customers around the world, this varies. I don't think every customer looks like a Silicon Valley startup. As a matter of fact, a French bank or a German automaker doesn't look like that at all. They will have private cloud infrastructure that they want to be flexible, agile, low-cost and dynamic. They want a PaaS platform. They want to use public cloud services and SaaS models as they make sense, and they are embracing them. But that idea that there is just one model, and I have seen businesses that have gone to public cloud providers and say, 'Would you please [give] us an instance of your public cloud in our data centers?' They say, 'That's not how it works. Our data center is in Iceland and Utah and we don't put them in Toronto or Calgary.'

So that is a different customer requirement. Customers are asking for credit card data, banking information, health-care information -- they are not going to move that and will never move that into the public cloud. Ever. So that's the difference. We are building the architecture using ACI, the APIC controller, the flexibility and the capabilities of OpenStack and we are saying, 'Hey guys, deploy that in your data centers, or get it from a provider or get it from a public service provider and you can have the same policy follow your application regardless of deployment model.' Nobody has that in the marketplace. Nobody has that.

NEXT: How Is Cisco Changing To Attack cloud And SDN?

CRN: How is Cisco changing organizationally to attack areas like cloud and SDN?

Lloyd: I think the key principles of what we are working on right now is to be able to do a couple of things. First of all, in the development organization that reports to me, we definitely need to be able to move our resources to some of the new areas and increase the amount of spending on innovation. There is some work going on in that area right now.

Let me give you some examples. We are going to move the entire engineering organization to a DevOps and an Agile development model. That's hard work. But, in many cases, it's a different way of doing things that will allow us to do things quicker, faster and much more customer-centric. So there is a change there.

The market is moving quickly. So we see investments in cloud, in data center, in collaboration and security, as a great example, as areas where we should keep making more investments. So you will see some prioritization and focus on moving to a more Agile and a more DevOps model in the engineering team. That is some work that is going on.

CRN: Are any changes being made specifically to Cisco's sales organization?

Lloyd: On the sales side, we definitely believe that coming together holistically and making sure that the execution of our product and services strategy in a partner-centric model is very tightly coordinated. So I think the view that those two teams should work together very closely … to execute on our strategy is very important. So [Senior Vice President of Cisco Services] Edzard [Overbeek] and [Senior Vice President of Cisco's Worldwide Field Operations] Chuck [Robbins] are working in that area to consistently align our resources so that their goals and objectives are very complementary.

CRN: Do you think Cisco's channel culture could change after CEO John Chambers retires?

I can tell you that the partner DNA in Cisco is so strong that there isn't one individual that could change that direction. No one wants to and no one intends to. It's a very, very strong thing that happens when we introduce new ideas. It’s very, very, very strong. So I don't think that strategic part of our approach to the marketplace, which has served us very well, I don't think that goes away regardless of any individual leader in any position -- regardless of who leads our partner organization, our or sales organization, or engineering or anything. It's just a part of the business model as to why we've been so successful. And there is so much happening right now and so much activity that, actually, continuing to create that co-creation model with our partners more now than ever is going to be required to handle the pace of change in the marketplace.

I think our partner model is an innovation engine for Cisco. I think it gives us a competitive advantage. And I don't think any one person in this company could actually overcome the way in which that is built into our DNA.

CRN: Partners largely consider you a potential successor to Chambers. How would you feel about taking on that role?

Lloyd: In regards to John's retirement, I would entirely leave every part of that up to him. And that's the best way to deal with it. He will be the one who talks about that. I don't want to be the one that talks about that.

Relative to the team, it's a very strong team here. We get along well. We like each other. It's hard, but fun, and we think we are on the right side of many market transitions. This is a great place to be with many, many strong leaders, and I consider myself one of many very strong leaders and one of many very talented men and women I work with.

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