Cisco plans to spend $1 billion over the next two years on cloud computing services as it tries to compete with Amazon.com Inc.

Cisco announced plans to build the world's largest global Intercloud - a network of clouds - together with a set of partners. The company expects to invest over $1 billion to build its expanded cloud business over the next two years.

Cisco plans to deliver Cisco Cloud Services with and through Cisco partners, including Australian service provider Telstra; Canadian business communications provider Allstream; European cloud company Canopy; Ingram Micro Inc.; Logicalis Group; MicroStrategy and more.

"Customers, providers and channel partners alike are turning to Cisco to create open and highly secure hybrid cloud environments, and they want to rapidly deploy valuable enterprise-class cloud experiences for key customers - all while mitigating the risk of capital investment," said Robert Lloyd, president of development and sales, Cisco. "The timing is right for Cisco and its partners to invest in a groundbreaking, application-centric global Intercloud to provide broader reach and faster time to market. Together, we have the capability to enable a seamless world of many clouds in which our customers have the choice to enable the right, highly secure cloud for the right workload, while creating strategic advantages for rapid innovation, and ultimately, business growth."

The Cisco global Intercloud will offer a suite of application- and network-centric cloud services. It is designed to allow organizations and users to combine and move workloads - including data and applications - across different public or private clouds as needed, securely, while maintaining associated network and security policies. It will also utilize Cisco Application Centric Infrastructure (ACI) to optimize application performance and to make rolling out new services much faster. Cisco will improve application security, compliance, auditing and mobility by using ACI's centralized, programmable security policy to enable control and isolation at scale; suitable for private and public cloud environments.

Cisco will sell the following new services through its channel partners and directly to end customers:

• PaaS / IaaS - virtual compute, storage, and networking with world-class economics
• Cisco Cloud Services powered by SAP HANA - the in-memory platform optimized for Cisco Unified Compute System (UCS)
• Collaboration -- Cisco WebEx suite of collaboration applications and services
  
• Security -- Cisco Scansafe managed threat defense
• Network Infrastructure Management -- Cisco Meraki (cloud managed networks)
• Virtual Desktop-as-a-Service -- desktop virtualization solutions from Cisco, VMware and Citrix
• Partner-branded Cisco Hosted Collaboration Services
• Cisco Videoscape Cloud DVR -- scalable cloud resources for content ingest, recording and playout
• Cisco Virtualized Mobile Internet -- a data delivery service
• Virtualized Managed Services -- cloud-based virtual services for faster provisioning and service agility (e.g., vFW, vPE and vCPE)
  
• Remote Management Services (RMS) -- remote management of IT operations enabled by Cisco Smart Services
  
• Compliance and Configuration Management Services (CMCS) -- automated management of Compliance and Configuration ITIL processes
• IT Service Management Services (ServiceGrid) -- cloud-based management of the IT Service Management function
• Energy Management Services (Energywise) -- automated management of electricity usage for the entire IT network
• Collaboration as a Service (CaaS) -- voice and contact center as a service.

Cisco is mainly providing networking hardware, and wants to take advantage of companies' trend to migrate to cloud computing, which reduces demand for equipment.