Cisco brings sovereign infrastructure to Canada with air-gapped portfolio

Raj Juneja, president of Cisco Canada In this episode of In The Channel, we speak with Raj Juneja, president of Cisco Canada, about the launch of Cisco’s Sovereign Critical Infrastructure portfolio in Canada – the second market worldwide after EMEA, where it debuted last September. The portfolio spans Cisco’s networking, security, compute, collaboration, and Splunk offerings, configured for air-gapped, on-premises deployment. The differentiator is trust-based licensing: Cisco can’t remotely access, control, or disable the products – control sits entirely with the customer. It’s certified to FIPS 140-2/3 and Common Criteria standards, and aligned with Canada’s ITSG-33 framework. Juneja confirmed the offering is open to the full partner ecosystem, not restricted to any one partner, with certifications consistent with existing Cisco portfolio requirements. Distribution plays its usual role. Target customers are government, financial services, healthcare, and AI providers – organizations that need to run sensitive systems without cloud connectivity or foreign vendor access. IDC research shows more than half of Canadian organizations are increasing scrutiny of their critical system providers, but intent is running well ahead of deployment. Partner economics details are expected in the coming weeks. The launch comes as HPE has been active in sovereign infrastructure in Canada, and the federal government funds sovereign AI compute through ISED’s AI Sovereign Compute Infrastructure Program. Read Full Transcript Robert Dutt: Hello and welcome to In The Channel from ChannelBuzz.ca, bringing news and information to the Canadian IT channel community for the last sixteen years. I’m Robert Dutt, editor at ChannelBuzz.ca and your host for the show. This morning on The Buzz, we covered the news: Cisco launched its Sovereign Critical Infrastructure portfolio in Canada. Here’s what that actually means and why it matters for the channel. Cisco has taken its core networking, security, compute, collaboration and Splunk portfolio and configured it for air-gapped, on-premises deployment – systems that sit in facilities customers own and run, with no connection to the outside internet. The key differentiator is what Cisco calls trust-based licensing. Cisco can’t remotely access, control or disable the products. That control sits entirely with the customer. This is aimed at government, financial institutions, healthcare and other critical infrastructure providers – organizations that need to run sensitive systems without depending on constant cloud connectivity or foreign vendor access. The portfolio is certified to FIPS 140-2/3 and Common Criteria standards, and is aligned with Canada’s ITSG-33 framework for achieving Authority to Operate on mission-critical government systems. Canada is the second market for this portfolio after EMEA, where it launched last September. This comes at a time when data sovereignty has become a board-level priority. IDC says that more than half of Canadian organizations are increasing scrutiny of their critical systems providers, but intent is running well ahead of deployment. That gap between wanting sovereignty and actually having it is where the channel plays. For partners, the big questions are about access, economics and the services opportunity. To help answer those, I spoke with Raj Juneja, president of Cisco Canada. Let’s get right into it – my chat with Raj Juneja. Robert Dutt: Raj, thanks for taking the time. I appreciate it. Raj Juneja: More than happy to take the time, Robert. I’m looking forward to the conversation. Robert Dutt: The announcement talks about the infrastructure being available through Cisco and its partners, and Bell is front and centre in the announcement. Is this an opportunity that’s open to the broader partner ecosystem, or is it limited to a set of partners? Regardless of which way that goes, what does a partner need? What are the “you must be this tall to ride the ride” specifications in terms of specializations, certifications and clearances to sell and deploy the portfolio? Raj Juneja: This is not, in any way, shape or form, limited or restricted to any one particular partner. This announcement is really about addressing the demand we’ve been receiving from our customers to have more control and autonomy over their digital infrastructure and their data. We’re happy to bring this to our partner community, but there is nothing that limits or restricts it to any one specific partner. The certifications that partners hold – if you’re speaking specifically to partner-oriented certifications – are no different from what we currently have for the rest of our portfolio. Robert Dutt: So it’s broadly available. Basically, if you’ve got customers who are interested in this, you have access to it, by the sounds of it. Raj Juneja: That is absolutely our intention. We’re not looking to restrict this in any way. It’s an offering – the portfolio that we have today – that’s being offered in a different form to address the needs of our customers for control and the ability to manage their infrastructure on their own. Robert Dutt: Especially for smaller partners, are distributors at play here? If so, what role do you see them playing both at launch and further out, as this has a chance to develop an ecosystem around it? Raj Juneja: Distribution serves an incredible purpose in our channel community. As I said before, I don’t see this being any different in terms of the way we go to market and leverage our existing, broad set of distribution partners today. This is intended to address the needs of customers who are looking for control and choice over their own digital infrastructure and data. Ultimately, the path they take to acquire the technology will be no different from how they currently buy today. Robert Dutt: Let’s talk a little bit about the commercial model here. Can you elaborate on what trust-based licensing means and how it differs from the usual Cisco model? Raj Juneja: Trust-based licensing effectively means that, when you don’t have any connection to the cloud, there is no capability for us to remotely disable the products. Nor is there any requirement for license governance or administration. This goes back to the choice and control that we talked about. The onus is primarily on customers to ensure that they are adhering to the licensing they’ve acquired from Cisco. Effectively, the only way we can offer the air-gapped licensing that we have is through trust-based licensing. Robert Dutt: In terms of partner economics, is this pretty much the same as any Cisco engagement? What can you tell me about revenues in terms of subscription, perpetual licensing or something new? Basically, how do partners earn on this? Is it the same as ever, or is it a combination of one-time and recurring revenue? Raj Juneja: I can tell you that there will be more clarity on the specifics around partner profitability as the announcement comes out. The main thing to take note of is that, typically, when we offer new solutions and bring them to market, our partner ecosystem has a clear path to get the technology into the hands of the customer base. Profitability is always top of mind for Cisco. I think there will be greater clarity in the coming weeks, but we’re very excited about being the first country after EMEA to launch this. Robert Dutt: Air-gapped, on-premises infrastructure is a pretty complex thing to deploy and manage. What do you see as the split for partners between product and services? In terms of the services side, is Cisco seeing this as a “deploy and hand it over” kind of engagement, or is it also going to be a “deploy and manage” managed services opportunity for partners? Raj Juneja: Because it’s in the hands of our customers, it’s going to depend very much on how they want to configure the choice and control they have. That goes back to working very closely with the partner ecosystem to determine the role partners will play. Our partners have been coming to us and seeking the ability to solve these demands for our customer base. They are ready and willing to help customers configure and adapt, as they’ve done in the past with other on-premises deployments. I see this following similar lines and being very similar to the way our partner ecosystem has helped customers deploy other on-premises solutions. Robert Dutt: So there’s nothing precluding this from being delivered as a managed service. It comes down to what customers are comfortable with and what they want – and, in some cases, what is legally available to them, given the type of infrastructure issues we’re talking about. Raj Juneja: Correct. Robert Dutt: Splunk is central to the security and observability story, and I know it’s a subject near and dear to your heart in particular. My understanding is that Splunk has traditionally been a data platform that benefits from connectivity to the cloud. How much of that capability exists in an air-gapped environment, and what do partners need to deliver to support that? How do they help customers get to the cloud when appropriate? Raj Juneja: Just to correct you, Splunk is offered both on-premises and in a cloud version, and has been for quite some time. I don’t think this will be any different in terms of requirements. Splunk is already configurable to be handled in an on-premises manner. In fact, we have a number of customers that leverage that choice and control in an on-premises fashion. That’s why the on-premises version of Splunk exists today: for customers that are heavily regulated. For customers and verticals that are looking for choice and control and want to take a hybrid approach, it will be in their hands to determine what data they want ingested and how they want Splunk configured on-premises to control that data, versus what they want to continue leveraging through our cloud-based offering. It can absolutely work in a hybrid fashion. Robert Dutt: You mentioned a little earlier that partners have been coming to you asking about sovereign capabilities. Can you quantify that or give me some colour around what you’re hearing from partners in terms of customer demand for sovereign AI? What are you seeing and hearing when you’re talking to customers about demand for sovereign AI today? Raj Juneja: Absolutely. There’s no question that, when you look at AI data centres and AI providers, and specifically at what’s happening in Canada with the AI for All strategy, it comes down to addressing questions around control, data and where that data resides. Those questions have been coming forward to our partner community as well as to Cisco. When it comes to AI-based offerings, Sovereign Critical Infrastructure is intended to help address that choice and control for AI providers. It allows them to take their AI offerings to market in a way that addresses on-premises requirements or hybrid deployments, because they may also be leveraging hyperscalers in certain cloud-based environments. Robert Dutt: You mentioned earlier that Canada will be the first market beyond EMEA to roll out this particular offering. My understanding is that it’s been available in EMEA for eight or nine months. As you’ve had a chance to talk to your peers in Cisco’s EMEA regions, is there anything you’ve learned that adds colour to how this is coming to market, or to the shape of the opportunity they’re seeing, that you think would be relevant to Canada? Raj Juneja: As I said before, Canada has big ambitions for AI, as does the rest of the world. There’s no question that the ability to turn that ambition into reality is dependent on having the right infrastructure. The demand that EMEA has been seeing, and the reason we’re so excited about launching this in Canada, is specifically about turning that ambition into reality. There is an acceleration in the ability to run AI workloads in data centres and AI factories. The key is the security and autonomy we’ve talked about – deploying AI on your own terms. That has led to the demand. EMEA has been the first beneficiary of that, and I was very excited when Canada was chosen as the second country or region to address this demand and help meet the needs of our customer base. Robert Dutt: Without getting too far into the weeds or potentially tipping your hand on the future, who do you think will be the early, slam-dunk customers? Who are the customers you can point partners toward today and say, “Go get it”? Raj Juneja: The thing with sovereignty is that it’s not one-size-fits-all. It really comes down to choice and control. If you look at government, it’s very much focused on that control piece. Government is absolutely going to be an interested party. But if you look at regulated industries such as financial services and healthcare, you’ll see that they still have requirements around adhering to regulations. Having the ability to exercise choice and control is also very important to them. I see this addressing multiple industries and verticals. I think this is a great opportunity not only for Cisco, but also for our partner ecosystem. Robert Dutt: Let’s talk about the competitive environment to bring it home. HPE has been talking about sovereign infrastructure in Canada for a while now. Microsoft has a story there as well. What’s Cisco’s answer to the “Why Cisco?” question, whether that’s against peer competitors or a “build it yourself” solution? Is the edge the breadth of the portfolio, the trust-based licensing, the partner model, or something else? What’s the wedge for Cisco? Raj Juneja: I can’t really comment on our competition or on what they are doing or choose to do. For us, we’ve been a supplier of leading-edge technology in Canada for more than 30 years. This is our opportunity to provide even more industry-leading technology to that customer base. The keys here are really the choice and control customers are looking for. I see a great opportunity for our long-standing Cisco customers to consider another offering from Cisco. For customers that are looking for Cisco to become an infrastructure provider when they weren’t previously leveraging us, I think this presents a great opportunity for them to consider Cisco. Robert Dutt: Given the current opportunity and market situation, I think anything around sovereignty is going to be really interesting to watch over the balance of this year and into next year. I’ll be very interested to see how this hits the market as it gets out there. Thank you for taking the time ahead of launch to tell us what you can at this point. Raj Juneja: Thanks very much. I enjoyed the conversation. Robert Dutt: There you have it, Raj Juneja from Cisco Canada. I’d like to thank Raj for his time. It was obviously a busy launch day for him and his team. To everyone listening, thanks for tuning in. Here are my takeaways. Cisco is making a meaningful bet here. The trust-based licensing model, where Cisco genuinely can’t touch the systems once they’re deployed, is a real differentiator. The fact that the offering is open to the full partner ecosystem, and not just a handful of larger partners, is good news for the channel. The services opportunity around deploying and managing air-gapped infrastructure is significant, and the Splunk integration gives partners that already carry Cisco networking a cross-sell story. Some questions remain, though. Partner economics – how partners actually earn on this – is still unclear, with Raj pointing to more details in the coming weeks. The competitive picture is also wide open. HPE has been aggressive on sovereign infrastructure in Canada. Microsoft has its own sovereignty offerings, and the federal government is actively funding sovereign AI compute. Cisco’s breadth – networking, security, compute, collaboration and Splunk in one stack – is the pitch. But we’ll need to see how that plays out in customer decisions. If you’re a partner with public sector or regulated-industry customers, this is worth understanding now. The demand is real, it’s running ahead of deployment, and the opportunity to help close that gap is where the channel plays. If you enjoyed this episode, follow or subscribe to the podcast. You can find us on Apple Podcasts, Spotify, YouTube and most podcast directories. Ratings and reviews are always appreciated, and they help other people in the channel find the show. Until next time, I’m Robert Dutt for ChannelBuzz.ca, and I’ll see you in the channel.