Cisco is to spend $1bn to enter the cloud services business as the networking equipment giant looks to tap a new, fast-growing market.
The company, which grew fast in the 1990s and 2000s by providing on-premise networking equipment to corporates and internet service providers, needs a cloud computing strategy to avoid being bypassed as corporate needs change.
"Everybody is realising the cloud can be a vehicle for achieving bettering economics [and] lower costs," said Rob Lloyd, Cisco's president of development and sales.
However, he emphasised that the company's shift in strategy did not mean that it was "embarking on a strategy to go head-to-head with Amazon".
Cisco says it will focus on the B2B market, with customers such telecoms companies offered internet-based services as part of a package. It also aims to tailor its offerings to ensure it works well with software from the likes of Microsoft, SAP and VMware.
It also made several other mobile and cloud acquisitions in 2013, as it focused on ensuring it had the technologies to manage the so-called Internet of Things. In January 2013, it acquired mobile network management provider Intucell and in March it bought cloud services provider SolveDirect.
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