Editor’s note: Technology Business Research Analyst Krisa Macomber assesses the impact of Cisco’s planned acquisition of Piston which positions it to be a bigger player in OpenStack “cloud” deployments.

HAMPTON, N.H. – Cisco (Nasdaq: CSCO) announced its intent to acquire OpenStack specialist Piston last week as a piece of its strategy to secure a leading position as a private cloud infrastructure provider by building a stable of enterprise-caliber OpenStack capabilities.

OpenStack has grown over the past six years to become one of the world’s most popular open-source cloud software platforms through its growing ecosystem of technology partners such as Red Hat and large community of developers.

However, enterprise production deployment has been limited to date due to technology and ecosystem immaturity. OpenStack is difficult to deploy and integrate into environments, and many SMB and midsize enterprise customers do not have the resources needed to make this transition, creating an industry pain point that Tier 1 solutions providers including IBM, HP and Oracle have an opportunity to solve.

TBR anticipates further consolidation of OpenStack vendors and increased production deployment of OpenStack-based private and hybrid clouds over the next one to three years as Tier 1 solutions providers invest to capitalize on this opportunity.

OpenStack plays an increasingly prominent role in Cisco’s Intercloud strategy, which centers on connecting the hybrid, heterogeneous cloud environments that today’s evolving application landscape requires. Last year, Cisco announced plans to invest more than $1 billion over the ensuing two years to build out its Intercloud business aiming to accelerating its transformation from a product- and hardware-driven vendor into a provider of next-generation solutions driven by services and software.

Cisco played an important role in connecting and securing the Internet, and Intercloud is its strategy to play a similar role as the hybrid cloud market matures. Evidenced by Cisco’s acquisition of OpenStack-as-a-service provider Metacloud in September 2014, and now its intent to purchase Piston, Cisco is leveraging investments to bet on OpenStack as the foundation of its private cloud infrastructure capabilities.

Piston is an expertise and technology buy for Cisco. Its key platform, CloudOS, makes it easier for customers to provision, deploy and automate management of large-scale distributed private cloud solutions. Private clouds are becoming more complex and distributed as customers shift a greater portion of their workloads — and more mission-critical workloads — onto private cloud environments. As a result of this trend, technologies like CloudOS that make it easier for customers to centralize management of many server clusters are becoming strategic for customers to improve operational efficiency.

Piston was co-founded by Joshua McKenty, a former NASA employee who helped launch OpenStack. Although McKenty has since left Piston to join Pivotal, Cisco is acquiring a team with deep expertise in optimizing OpenStack private cloud infrastructure needed to bolster and differentiate Cisco’s portfolio in a rapidly changing, increasingly competitive environment.

(C) TBR