Web hosting and cloud software maker Parallels announced last week that networking giant Cisco had acquired an equity stake in the company, a move that will certainly enable the two companies to collaborate on the direction of their products around cloud services.
According to reports, the investment amounts to a small, 1 percent stake in Parallels, but gives Cisco a spot on the company’s board of directors. According to Parallels, the deal will “strengthen inter-company collaboration towards accelerating customer adoption of Parallels cloud service delivery products with Cisco cloud and data center infrastructure solutions.”
While some reports say Parallels is “better known” for its desktop virtualization software, the investment from Cisco is a significant validation of the company’s role in the data center hardware virtualization space, and the importance of the Parallels platform to enabling the delivery of cloud services by service providers.
Cisco says in the announcement issued by Parallels that the deal is a move toward building a more efficient cloud delivery model for service providers, and an opportunity to fuel innovation internationally through Parallels’ presence in Russia and elsewehere.
A report from Business Insider points out that Cisco’s interest in Parallels may also reflect the company’s souring relationship with virtualization giant VMware around the data center.
Cisco is a big customer of the products of both VMware and its parent company EMC, and co-investors with VMware in a data center hardware company called VCE. But that relationship was disrupted, writes Julie Bort, in the Business Insider piece, when VMware acquired software-defined networking startup Nicara last summer.
Since then, a series of movies have driven the wedge further between Cisco and VMware. Back in October, Cisco acquired cloud networking software company vCider, a move many described as a response to the Nicira deal, and released its own flavor of the open source OpenStack cloud software platform, a software platform that competes directly with VMware.
By getting involved with Parallels, Cisco is forging another relationship that could limit or eliminate the need for Cisco to rely on VMware’s virtualization tech as part of its data center hardware
Money aside, the benefits of the relationship to Parallels are less explicit, though Parallels CEO Birger Steen is quoted in the press release as saying that strengthening its partnership with Cisco is part of a focus on “offering an end-to-end solution for cloud service providers.”
That could mean that Parallels sees the partnership with Cisco as an opportunity to build a hardware component into the set of virtualization, automation and other cloud platform tools it provides.
An interesting component of the various arrangements is the various companies’ relationships with the service provider space. While Cisco and EMC hardware products are generally considered “enterprise” hardware, they are well represented in service provider environments where compatibility with enterprise environments is important.
The same is true of VMware, though, as a platform, VMware has spent the last few years designing its solutions to better fit service provider environments. Parallels, on the other hand, has been focused on delivering its virtualization solutions as part of a broader platform that involves billing and automation solutions for service providers, with the company counting more than 5,000 service providers among its customers.
Talk back: What do you think the partnership means to Cisco and Parallels? Does Parallels’ technology have a role to play in Cisco’s hardware, or vice versa? Let us know in the comments.