OpenStack technology revenue will soar from $883m in 2014 to $3.3bn in 2018, representing a 40% growth rate in six years, analyst firm 451 Research has forecast.
OpenStack started off as a joint initiative in 2010 between Nasa and managed cloud provider Rackspace. Since then, it has gained the support of 60 IT providers, including several heavyweights such as Oracle, IBM, HP, SAP, Red Hat, Intel, NetApp, Dell, Mirantis, Cisco and, most recently, traditionally proprietary company VMware.
Billed as the Linux of the cloud world, OpenStack is the open-source infrastructure as a service (IaaS) that allows enterprises to create and manage large groups of virtual private servers in a datacentre.
In August 2014, VMware announced Integrated OpenStack – a service that provides users with the flexibility to build a software-defined datacentre on any technology platform (VMware or not). The service, when available in 2015, will help customers repatriate workloads from "unmanageable and insecure public clouds", VMware said.
"OpenStack has seen tremendous growth over the past four years in terms of investment and community expansion," said Al Sadowski, research director for 451 Research. "It is increasingly a consideration for private cloud deployments, and the business models within the ecosystem continue to evolve."
Its flagship users include CERN, eBay, PayPal, ComCast, Sony, Yahoo, MercadoLibre, Deutsche Telecom, Wells Fargo and AT&T, as well as HP and Rackspace clouds.
As the market for OpenStack-related products and services is set to quadruple in size by 2018, here are six key factors pushing OpenStack to the mainstream:
Interoperability and open-source APIs
A lot is down to its openness and interoperability. Enterprises want cloud environments that are open, interoperable and secure. But a lack of meaningful standards and interoperability of workloads back and forth from one cloud platform to another and from on-premises infrastructure to the cloud has hindered cloud’s adoption.
“Users want flexibility,” Mark Collier, OpenStack co-founder and OpenStack Foundation chief operating officer, told Computer Weekly. “Freedom from supplier lock-in and interoperability are important values customers want.”
The OpenStack Foundation is making sure all products labelled “OpenStack” have a certain set of core compatibility and interoperability features
According to Collier, enterprises are moving towards a hybrid IT world. A hybrid infrastructure is most useful when it provides a common platform to consistently deploy workloads between clouds without making resource-intensive changes to operations, tools and processes, he said.
“With OpenStack deployments, customers gain early adoption, flexibility and cost control, while avoiding supplier lock-in,” said Simon Hassall, worldwide go-to-market strategist for HP Helion OpenStack.
“OpenStack gives customers the opportunity to be in the driver's seat when it comes to innovation – they are active protagonists in their organisations' cloud journeys,” he said.
To ensure the long-term value of the OpenStack, the foundation is making sure all products labelled “OpenStack” have a certain set of core compatibility and interoperability features.
The open-cloud platform’s attractiveness to enterprises and service providers is associated with the benefits of open-source software in general, including flexibility, cost savings, avoiding supplier lock-in and the ability to customise for integration with other infrastructure and applications, said 451 Research's Sadowski.
Community effort and code contribution
“A strong community which contributes codes is advancing OpenStack’s uptake,” said Collier. “People love to be part of the community and mentor each other.”
CERN sees great value in open-source technologies such as OpenStack because they foster continuous technological improvements through community contributions, while also offering the ability to quickly address challenges, such as massive scaling, by leveraging the work of others, CERN’s infrastructure manager Tim Bell has previously said.
In four years, OpenStack has garnered a critical mass of users, said Jonathan Bryce, executive director of the foundation. “There are hundreds of thousands of virtual machines running on OpenStack today and users are becoming very engaged and driving innovation.” Users such as Disney, Sony, ComCast, Yahoo, and eBay actively contribute to OpenStack’s development.
OpenStack also gives users many ways to consume the software, whether on-premises, in a service provider’s datacentre or as a hybrid model. The foundation has also launched a marketplace to give enterprises an open and transparent means to evaluate the full spectrum of OpenStack deployment options.
“In the software-defined era, businesses face constant pressure to move faster and are focused on adding value through rapid app development,” said Collier. “That’s why we’ve seen so much traction for OpenStack in the hosted private cloud market.”
The new market will help companies identify which providers are offering OpenStack-powered, fully managed infrastructure that suits their needs.
Backed by IT providers
The involvement of larger suppliers has created a collective determination to do what it takes to make enterprise adoption of OpenStack possible, in due time, wrote Gartner analyst Lydia Leong on her blog.
While the platform is still relatively young, it is growing quickly, with new releases every six months. Today, it is the most pervasive and recognised open platform in the cloud computing arena, HP’s Hassall said.
More on OpenStack
“The big storage or networking suppliers that enterprises are using in their datacentre infrastructure are all members of OpenStack,” said Bryce.
He added that users are driving supplier support for the OpenStack cloud platform, citing the example of Latin American e-commerce player MercadoLibre, which was using OpenStack and NetApp storage. This led to NetApp’s engagement with OpenStack.
But OpenStack implementations require a certain level of technical expertise to deploy. Ebay, when implementing OpenStack, faced technical challenges because it “did not have a supplier to go to that would fix its problems”, said eBay’s head of cloud engineering, Suneet Nandwani.
The speed at which enterprises are looking to implement OpenStack cloud technology is now outpacing the number of IT professionals skilled in OpenStack. But to fix this gap, HP has launched Helion OpenStack Professional Services to provide users with consultancy, IT support and access to OpenStack experts.
Industry players are also increasing their OpenStack contributions towards testing, infrastructure resources and enterprise-grade features and functionality to give customers growing assurance in OpenStack deployments. “There are still some public concerns around the security and reliability of OpenStack,” said Hassall. “But industry players’ contributions will boost user confidence.”
Meanwhile, VMware is investing its own development resources to help build the OpenStack framework.
VMware will make it easy for IT to deploy OpenStack on VMware’s technologies and enable customers to use its management tools to deliver key capabilities in areas such as troubleshooting, log management, capacity planning and chargeback.
“The end result will be OpenStack infrastructures that give developers the tools they want, and give IT the reliable and easily managed datacentre infrastructure they need,” said Amr Abdelrazik, product marketing manager at VMware.
Maturity of the technology
That OpenStack is not production-ready is a myth, said Collier. “Since the Grizzly and Havana timeframe, OpenStack technology has become more stable, thanks to users and their contributions,” he added.
Grizzly and Havana are OpenStack’s seventh and eighth versions. Enterprises such as CERN are currently using the Havana version of OpenStack cloud. The open cloud’s latest release is called Icehouse, released in April 2014.
The bulk of our focus has been on improving users’ experience of OpenStack
Jonathan Bryce, OpenStack Foundation
“There is no doubt the technology is production-ready,” said OpenStack Foundation's Bryce. “With Icehouse and Juno [the upcoming version], a lot of the focus has been in making it easier for enterprises to upgrade from the previous version to the next.”
But that’s not all. The technology is matured to allow enterprises to simply upgrade one feature at a time depending on their priorities. “Users can just upgrade their Object Storage feature or just concentrate on the dashboard upgrade without worrying about networking upgrades.
“The bulk of our focus has been on improving users’ experience of OpenStack,” said Bryce.
The technology has grown into a platform that gives customers a choice in how they move forward in the cloud, according to Rackspace.
“Another key advantage is modularity, which can enable a diverse and vital ecosystem via add-ons and plugins,” said 451 Research's Sadowski.
An OpenStack user survey at the time of the release of Icehouse found that cost savings, alongside operational efficiency, was seen as the top driver of its adoption.
One of the top automotive companies, with more than 20,000 employees worldwide, turned customer insights into business action with OpenStack cloud at one-tenth the cost of its legacy infrastructure, said Bryce.
The carmaker wanted a technology infrastructure to collect, store and analyse petabytes of data from vehicle sensors, customers, dealers and social media. Its existing commercial legacy appliance, costing over $1.2m, was incapable of handling the workload, so it turned to cloud computing.
It deployed a $125,000 OpenStack cluster set to scale from proof of concept to a 10-rack system in six months and the platform was able to handle the complex data analysis project.
“The company was using a converged appliance system, so not really archaic IT," said Bryce.
Telco cloud, NFV and SDN
Bryce forecast that the next wave of growth for OpenStack will be in the telco space. "NFV (Network Functions Virtualization) is becoming real within OpenStack," Bryce said. "A big group of telcos including Telefonica, AT&T, Swisscom, Nokia Networks are all changing how they provision network."
NFV is an initiative to virtualise network functions previously carried out by dedicated hardware. Companies such as Nokia Networks is collaborating with Juniper Network and Red Hat to create OpenStack-based telco cloud infrastructure to give mobile operators flexibility.