AWS Summit 2014

One of the reasons I went to the AWS Summit was to discover success stories for vendors in the AWS Marketplace, and I was not disappointed. In one presentation, a representative Cisco gave a talk about the CSR1000v cloud router, which they claim has sold over 400 licenses to date. If those licenses were all in use 24/7, this could lead to $3M in revenue. Although this is a drop in the bucket compared to Cisco's $48.6B in revenue last year, it was said that they see the cloud router business as a more profitable business than hardware routers.

VPC: the missing features

A talk given later that day by Yinal Ozkan was full of useful pointers about Amazon's Virtual Private Cloud, the (relatively) new networking system in the AWS cloud that lets users create multiple virtual private networks.

VPC is a software-defined network in the AWS system which has some real strengths, such as no single point of failure and linear scalability with the number of machines in the VPC, but it is relatively feature poor. If you want to run a software VPN (to let employees connect to the network from anywhere) or run a NAT, you have to run a network router in an EC2 instance.

Now, you've got quite a choice. For a small operations, OpenVPN is an inexpensive choice. However, Cisco's product runs the full Cisco IOS so it has a rich feature set. Since network administrators everywhere are familiar with Cisco routers, this product provides a quick way to integrate a VPC with a corporate network. The product meshes easily with Cisco's sales and support.

A better business?

One of the most interesting statements was that the cloud router was a "better business" than hardware routers -- and this is coming from a company where hardware sales are a well-oiled machine. The development costs of deploying IOS software on an EC2 router are much lower than that of developing a hardware platform to run it on. The AWS Marketplace provides a way to deploy the product without worrying about manufacturing or logistics or even billing.

Although the success of Cisco in the cloud has a lot to do with an established product line that people want and understand, it will be exciting to see more companies, especially small ISVs, take advantage of cloud economics.