Analysis of the State of OpenStack – OpenStack Silicon Valley

Datetime:2016-08-23 02:06:31          Topic: OpenStack           Share

This week @theCUBE team will be covering the OpenStack community at the annual OpenStack SV event in Mountain View, California.  SiliconANGLE Media has research on this topic at Wikibon.com (registration required) for all the latest on OpenStack and the impact of cloud computing.   

State of OpenStack 

OpenStack community was going through a period of introspection, transformation and evolution. What started as a small community hoping to disrupt the largest public clouds and private clouds has evolved into a large community that is beginning to branch out in new directions

Community – The OpenStack community of vendors has grown and consolidated in expected and healthy ways.

In many ways, the evolution of OpenStack has paralleled the evolution of the Linux market. At one point, there were nearly a dozen different vendor-specific OpenStack distributions trying to gain traction in a small market footprint. Likewise, there were 15+ Linux distributions back in the late 1990s and early 2000s. Just as Linux consolidated down to just a few main distributions (Red Hat, Canonical, SUSE), the OpenStack community has contracted the distributions through acquisitions or natural market-driven reductions (HPE Helion, Mirantis, Red Hat). In addition, the OpenStack Foundation has put programs in place to certify and validate interoperability between different OpenStack implementations. Not only does this consolidation bring together groups of OpenStack engineers, but it also forced some companies to rethink their goto-market and revenues models.

Operations / Consumption – Invisible OpenStack is the best OpenStack.

It’s no secret that part of the reason for OpenStack’s adoption rate has been end-user frustration with the complexities of operating an OpenStack environment. This has been openly discussed at previous OpenStack events and is highlighted in the OpenStack User Survey (April 2016) .

Production Deployment Challenges

Due to these challenges, new consumption models have emerged in the market that allow end-user customers to consume programmatic infrastructure (e.g. OpenStack) as a service. Offerings that deliver these capabilities include Cisco MetaPod, IBM Bluebox, Platform9, Rackspace and ZeroStack. These offerings allow customers to have physical resources that are either in their own data center or any remote data center (e.g. CoLo, Cloud provider) and the OpenStack services are centrally maintained and managed. In essence, the OpenStack portion of the service is invisible to the customer. This allows their IT organization or developers to remain focused on applications and projects they help drive revenue for the business.

Business Model – Is there enough revenue to continue the momentum?

Regardless of the number of attendees at the event or the technical progress of the working groups, the topic of revenues always comes up at OpenStack events. The reported earnings of AWS ($2.56B, Q1FY’16) and VMware ($1.59B, Q1FY’16) are always considered benchmarks for the OpenStack community. Both of those companies have been in business for 10 years or more. As with most open source software projects, it can be difficult to compare revenue because many early-adopter companies use the free version of the software rather than paying a support license, using professional services or consuming a paid service. At this point in time, none of the major OpenStack vendors (Cisco, HPE, IBM, Mirantis, Red Hat) break out the individual revenues associated with their Red Hat business. The data (below) from Rackspace shows that the overall market is $1.25B, with some industry projections near $3-4B by 2018. Wikibon believes that the leading vendors are currently at or below a $100M/yr run-rate for OpenStack-related business (hardware, software, services).

Success Cases –  NFV is emerging as a leading use-case.

The biggest surprise and most frequently discussed topic at any OpenStack events in 2016 was Network Functions Virtualized (NFV), an evolving networking architecture where edge-services (e.g. load-balancing, caching, proxying, firewall, IDS/IPS) are virtualized and run as software services on x86 servers instead of traditional networking equipment. This is an architectural movement that has been popularized by the largest telcos, as they prepare for even greater 5G data usage-models from mobile devices and IoT devices.

The NFV use cases make sense for the telcos because they require the ability to orchestrate on-demand network-services as device usage continues to grow, and the OpenStack and OPNFV working groups may prove to be a path of lesser complexity to define new standards rather than going through existing standardsbodies. While the percentage of telco OpenStack users is considerably smaller than IT organizations, it is highly likely for this market-segment to generate as much or more revenues for OpenStack vendors in the next 3-5 years.

Technology Ecosystem – The OpenStack Foundation finally understands OpenStack’s role in a bigger Cloud Computing world.

For many years, OpenStack billed itself as “the OS for the Cloud”. Each new year brought out new projects and working groups (e.g. PaaS, Containers, Big Data, etc.), often expanding into areas well beyond the original Infrastructure-as-a-Service (IaaS) vision of OpenStack. In 2016 the OpenStack foundation clearly highlighted that in order for OpenStack to be successful, it would need to work more closely with a series of other technologies. During the 2015 summits in Vancouver and Tokyo, container technology (e.g. Docker, runC) was one of the most in-demand technologies for learning and expanding the OpenStack footprint. In 2015 the focus was on having an option to run end-user applications in containers, instead of virtual machines being the only option. This year, a new concept was introduced – running OpenStack on containers. The example used at the summit was called “Stacknetes”, where the OpenStack control plane becomes an application that runs on top of containers that are scheduled and managed by Kubernetes.

Summary 

OpenStack community and technology has stabilized to the point where Private Cloud deployments are realistic for many customers. Customers should be exploring the breadth of consumption models which best align to their existing skill-sets and business goals, learning from some of the struggles of IT organizations in the past – e.g. building and operating OpenStack from trunk is extremely difficult.

For more OpenStack and cloud research or Wikibon.com/cloud (subscription required) or just follow @theCUBE .

John Furrier

John Furrier is founder, co-CEO, and Editor-in-Chief of SiliconANGLE, a new media company covering the intersection of computer science and social science. Furrier is also the co-founder and CEO of CrowdChat a social media platform for large-scale group conversations over hashtags. In addition to SiliconANGLE John runs Broadband Developments a private incubator and investment firm for creating new startups. Furrier lives in Palo Alto, California with his wife and four children.





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