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Cisco Systems Inc. will be making aspects of its IP voice technology available virtually and sold as a service as part of a continuing set of improvements to its cloud computing strategy, the company's CTO said today.

Cisco will be "virtualizing voice products [to] sell voice as a service," said CTO Padmasree Warrior, in a Web conference with reporters and analysts. "Certain aspects of voice will be virtualized."

The move was somewhat expected as Cisco begins to offer more cloud computing technologies as it faces an array of competitors in both the cloud computing and unified computing areas.

Warrior and Doug Dennerline, senior vice president of Cisco's collaboration software group, talked about strategy and direction for collaboration and cloud technologies as part of the networking company's biggest annual user conference, Cisco Live! in San Franciso.

Warrior didn't give details about virtualizing voice, but analysts said they assume it will be offered mainly in private clouds used in major corporations that already have Cisco networks. Conceivably, that could include clouds run by voice carriers that serve both businesses and consumers.

Warrior and Dennerline also said that Cisco will differentiate itself from other cloud computing vendors by allowing customers to use their own networking gear together with the services in the cloud.

In one example, Dennerline said the company's ASR 1000 router now includes Cisco's Webex Web conferencing capabilities, which means 300 workers in a corporate headquarters can join a Webex session on the corporate LAN, instead of each of the 300 being required to reach out to a networking cloud to be part of a global Webex session.

Cisco's Webex group operates 220,000 Web conference meetings per day using nine network operations centers globally, Dennerline said. While Webex has had great success, it can be improved, he noted. In one small example, he said that today Webex allows six windows with six people of videoconferencing per desktop at 15 frames per second, "which is not very good." But the video could be high definition, and Cisco is working on doing that, he added.

Webex Connect, its Web conferencing tool, will be upgraded to a new version by the end of the summer, Dennerline said, giving it presence technology and IM capability from the cloud, combined with on-premise IP video capabilities.

Regarding service providers, such as AT&T Inc. and Verizon Communications Inc., and their role in offering their own version of cloud computing, Dennerline said that Cisco already offers many managed services through the service providers, but will begin to offer more that are software-oriented. "Service providers will play a large role and some will have part of the business ... They won't want to miss out on this market."

The total market for cloud computing has been estimated at $16 billion globally in 2009, but will jump to 42 billion in 2012, according to research firm IDC.

Cisco Systems won't try to compete with pay-as-you-go cloud computing providers such as Amazon, and instead will sell its infrastructure to those companies and provide its own software as a service.

The company sees virtualization as the next major computing model and its own Unified Computing System as the first step toward a fully virtualized data center, Chief Technology Officer Padmasree Warrior said in a briefing Monday during the Cisco Live user conference in San Francisco. The company's presence in both enterprise and service provider networks makes it the ideal partner for companies adopting cloud computing, because they want to gain cloud benefits such as scalability and disaster recovery without pushing out control of all their infrastructure, she said.

Cisco is positioning itself in the cloud world as all major vendors find their places there. Warrior said her company's approach differs from those of rivals Hewlett-Packard and IBM because those vendors are moving into the sale of cloud computing resources. Cisco doesn't see a big enough opportunity in that business, she said.

There are four layers in cloud computing, Warrior said: software as a service (SaaS), development platforms as a service, capacity as a service, and the underlying infrastructure for providing those services. Cisco already provides software as a service, in the form of its WebEx collaboration and IronPort security products. Its WebEx Connect offering for third-party application development is a platform as a service. Cisco will leave the business of selling raw capacity to others, while supplying the infrastructure for those kinds of companies, Warrior said.

With Cisco-based cloud infrastructures available for hire, enterprises will be able to hold on to some of their own resources while tapping into public clouds and smoothly moving data, applications and computing workloads between the two, according to Warrior. Cisco's Unified Computing System, which combines the company's new blade server platforms with networking and storage elements, is a step toward that capability, she said. It's a pre-integrated architecture that removes the burden of manual integration from the enterprise IT department, according to Cisco. The company has already sold UCS to some customers, Warrior said.

Cisco doesn't intend to have a completely closed system between enterprise and cloud-provider networks, she added. Where the infrastructure on one end isn't Cisco's, the company's goal is to work with other vendors' systems, she said.

The company also gave an update on its WebEx SaaS collaboration product. Cisco is updating the WebEx interface to appeal to "Main Street" users in addition to the "early adopters" who have made up much of its user base, said Doug Dennerline, senior vice president of Cisco's Collaboration Software Group.

The software will be oriented less toward virtual meeting spaces and more toward individuals whom a user collaborates with, he said. For example, users will be able to click on a contact's name in an instant-messaging buddy list and see a history of interaction between the user and that person, such as what meetings they have both attended. If any of those meetings were recorded, links to those recordings would also pop up.

Cisco is also using its acquisition of PostPath last year to create a cloud-based e-mail system integrated with the presence technology it acquired from Jabber, Dennerline said. And its move to bring smartphone users into WebEx is continuing, with more than 150,000 downloads so far of the WebEx application for the iPhone, he said. Cisco is also talking with Research In Motion, Nokia and Samsung about smartphone clients, he added.

Cloud computing is critical for collaboration because the next wave of productivity gains will come from inter-company collaboration, Warrior said.

There is a trend toward richer collaboration between companies, where so far most tools for interaction have been within organizations, said IDC analyst Abner Germanow, who attended the briefing. This is where Cisco has an edge over its competitors, namely Microsoft and IBM, which have dominated intra-company collaboration, he said. The faster that enterprises move in this direction, the better for Cisco, Germanow said, because its rivals are trying to catch up. However, the trend is likely to take two to five years to play out, he said.