Cisco to spend over $1 billion to enter the cloud computing market

Cisco has pledged to spend over $1 billion entering the cloud computing market in order to offer corporate clients the same services as rival firms. The San Jose, CA-based firm is giving itself two years to enter the market. As many companies begin to shift their focus and offer third-party IT solutions for enterprises — rather than only computing systems — Cisco hopes that cloud computing will pave the way to improved future profitability.

Cisco Systems Inc plans to offer cloud computing services, pledging to spend $1 billion over the next two years to enter a market currently led by the world’s biggest online retailer Amazon.com Inc, the Wall Street Journal reported. Cisco said it will spend the amount to build data centers to help run the new service called Cisco Cloud Services, the Journal reported. Cisco, which mainly deals in networking hardware, wants to take advantage of companies’ desire to rent computing services rather than buying and maintaining their own machines. Enterprise hardware spending is dwindling across the globe as companies cope with shrinking budgets, slowing or uncertain economies and a fundamental migration to cloud computing, which reduces demand for equipment by outsourcing data management and computing needs.