How to Monetize the OpenStack Wave
May 4, 2012
After OpenStack was announced at OSCON in the summer of 2010, the degree of momentum behind this new open source platform has been nothing short of spectacular. Startups and enterprises alike have placed their strategic bets to monetize the OpenStack wave in various ways. As an ecosystem insider and one of the founding sponsors of the OpenStack Foundation, I wanted to offer my views on how various organizations are looking to skin this cat.
I’d like to focus on three of the many efforts currently underway. These three, in particular, happen to be the most vocal about their position and represent three distinct strategy camps. They are Nebula with its OpenStack appliance, Piston with its PentOS cloud operating system, and Dell’s Crowbar, an OpenStack installer.
While all these approaches appear radically different on the surface, all three ultimately offer the same exact final product to the customer: a cloud-enabled rack of servers. Moreover, in all three cases, the customer is required to purchase a particular type of hardware for the solution to work. The Nebula appliance in the case of Nebula; an Arista Switch with Silicon Mechanics servers in the case of Piston, and Dell PowerEdge C servers, in the case of Crowbar.
Nebula, founded by NASA employees that were originally behind the OpenStack compute (aka Nova) project, has opted to deliver an integrated OpenStack appliance. Advertised as an open solution (…OpenStack, Open Flow, Open Compute – you name it), in actuality, it is a proprietary network switch pre-loaded with software that will automatically deploy the OpenStack-like environment onto a set of servers that plug into it. While maybe not the most open option, Nebula’s offering is probably the most straightforward. Grab the appliance, plug in some Open Compute compliant servers and storage and, voilà! Youhave a cloud (or so they claim).
Piston, also founded by NASA alums, went the software route. Instead of building a physical network switch, the company chose to deliver PentOS, the cloud operating system based on OpenStack that is hardware agnostic … kind of. At this point, there is only one certified reference architecture that specifically requires Arista switches and servers from Silicon Mechanics. Longer term, there is a vision to support most commodity hardware configurations.
Finally, there is Dell and Crowbar. Dell’s approach to riding the OpenStack wave is, perhaps, the most creative. Crowbar is neither a hardware appliance nor an enterprise version of OpenStack. It is a configuration management tool built around OpsCode’s Chef, designed specifically to deploy OpenStack on Dell servers. Crowbar effectively serves as the glue between the hardware and any distribution of OpenStack (and not only OpenStack). To generalize these approaches, I would classify Nebula as belonging to the “hardware camp,” Piston to the “OpenStack distro camp,” and Dell to the “tools camp.”
Aside from the three players I explicitly described above, there are other members in each of these three camps. Nebula’s hardware camp is shared by MorphLabs with their converged OpenStack infrastructure offering. The OpenStack distro camp, which Piston belongs to, has folks like CloudScaling and StackOps under its roof. Finally, the Dell Crowbar camp is shared by Canonical, with its Puppet- based Juju installer. I believe Rackspace CloudBuilders will eventually join the tools camp in some shape or form.
The key difference between these three camps is in the degree of openness and rigidity of coupling between hardware and software. Ultimately, it all comes down to the age old tradeoff between simplicity and flexibility. These three camps are generalizations of approaches where companies have placed their bets at different points of the simplicity vs. flexibility trade-off scale. The hardware camp is betting on simplicity, at the cost of openness. Just like an iPad, Nebula’s appliance may be very simple to use and beautifully designed, but nobody has a clue about what’s inside except for the people that built it. The tools camp is betting on openness, but does so at the expense of ease-of-use. The OpenStack distro camp is somewhere in the middle.
I believe that the tools approach is more effective in the context of large scale deployments, such as enterprise-wide cloud rollouts, cloud enablement of service providers, or infrastructure refactoring for SaaS vendors. Traditionally, the scale of application infrastructure is inversely related to one’s propensity to use proprietary, closed products. Leveraging third-party solutions for massive infrastructure build-outs simply doesn’t yield the agility and economics required to be successful. For that exact reason, when one examines Facebook, Amazon, or Google infrastructure, virtually no third party, proprietary solutions can be found inside the stack.
The simplicity approach targeted by the OpenStack hardware camp and OpenStack distro camp is what appeals to smaller, department-level enterprise deployments, such as situations where IT is not the core competency of the organization and application infrastructure is fragmented into a series of diverse silos of smaller scale. These are the scenarios where organizations don’t care about lock-in or cost at scale; they need an out-of-the-box solution that works and a button to push for support when it doesn’t.
Now, if we looked at the three approaches from the pure business perspective, there is an interesting dynamic at play. (As a co-founder of an OpenStack systems integrator closely partnered with Dell, my opinion on the business aspect is completely biased.) Nevertheless, here is how I see it…
On the one hand, diverse enterprise IT silos is the bigger chunk of the overall application infrastructure pie, at least for now. On the other hand, when it comes to simple, proprietary enterprise solutions aimed at these diverse IT silos, the line of vendors offering them is out the door and around the corner, with VMWare controlling the bulk of the market.
Historically, the philosophy of the OpenStack community in general was about the very notion of openness, scale, and flexibility. RackSpace, a company with the service provider mentality, has been dominating the project technical board since inception and drove the OpenStack brand forward. Their build-for-scale, build-for-flexibility approach has spilled out into the community and affected both technical and marketing decisions. Consequently, the majority of OpenStack deployments we hear about today – Internap, Korea Telecom, Mercado Libre, Yahoo etc. – are all in the service provider / Internet application vendor space. I don’t see OpenStack as something that was built for enterprise IT silos.
Monetizing OpenStack by betting on openness at the expense of simplicity, such as the companies in the tools camp have done, may not be about penetrating the biggest market, but at least it is in line with the current momentum of the OpenStack community. On the other hand, leveraging the still young and fairly immature OpenStack platform, architecturally aimed at Web-scale deployments to build proprietary offerings that target enterprise IT silos and rival VMware, Citrix, and Microsoft, is a risky business proposition.