This could be interesting ...
... if it essentially links customers' AWS VPCs to their on-premises networks. The potential is more in edge routing than the inside the data center switching.
If Amazon only ends up taking significant costs out of on-premises IT, it could delay cloud adoption, rather than accelerate it.
Another alternative would be to provide an on-premises networking experience which mimics the AWS networking experience. Thaw would be highly disruptive to Cisco and the other networking players.