Cisco (Nasdaq: CSCO) says it plans to spend more than $1 billion over the next two years to build up its cloud computing network in what the company calls the “World’s Largest Global Intercloud.”

Cisco plans to use the money to expand its data centers for the new service to be called Cisco Cloud Services as part of a network of connected clouds. The company sees cloud computing as helping drive the “Internet of Things” – a global web of Internet-connected devices that Cisco Chairman and CEO John Chambers has labeled as a $19 trillion opportunity.

“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 at 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,” he added. “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 move makes the San Jose, Calif.-based networking company the latest to enter an arena that caters to the growing number of companies that would rather rent computing space than build their own.

One of the biggest players in the market is Amazon.com. IBM Corp. said in January that it will invest $1.2B in its cloud computing operations.

Cisco says it will work with a set of partners to build up the network. The company already provides cloud-related services, including the online conference provider WebEx.

Cisco Cloud Services Offerings

Cisco’s offerings include:

  • PaaS / IaaS – virtual compute, storage, and networking with world-class economics [PaaS stands for platform as a service; IaaS stands for infrastructure as a service]
  • Cisco Cloud Services powered by SAP HANA – the popular 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 premium 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 employs some 5,000 people at its campus in RTP.