With the OpenStack Summit in Atlanta approaching next week – it has me thinking about the state of OpenStack and cloud infrastructure. I have been a believer for a long time. I have made only two related investments in the OpenStack ecosystem – MetaCloud and SwiftStack – but these two investments have given me a field level view that OpenStack is indeed growing its installed base. There are certainly other indicators like the billion dollar pledge by HP with Helion. Infrastructure and architectures change slowly but its happening. We are at the end of the beginning of the new rebuild of the data center infrastructure stack.
VMware seems incredibly well positioned especially with its vCloud hybrid solution. If you haven’t checked it out – you should. This product could really knock the cover off the ball – at least with the installed base. I have to imagine new licenses will slow for VMware over time but their existing installed base is enormous and they are the undisputed leader. Microsoft and Citrix never really offered a worthy challenge.
However, what I am seeing is that many new production, test and development deployments are happening on OpenStack. While its harder to justify moving existing infrastructure that is running in production without problems onto OpenStack – even if there is the potential for savings – new deployments, new initiatives, expansion are a different stories.
And its not just compute virtualization where the battle is raging – storage is changing dramatically as well. Inktank, the commercial entity behind Ceph was acquired by Redhat which was a huge win for SDS (software defined storage). EMC made it very clear this week that they view AWS and public cloud storage as a major threat introducing Elastic cloud and VIPR. They are working incredibly hard to align their storage strategies with the gravitational pull of the software defined datacenter. Its impressive and worth looking at I think.
AWS marches on with 1000+ enterprise focused sales people and a relentless focus on execution. Amazon is truly impressive. Really impressive. However – I continue to believe that the economics of AWS work well for the long tail (which might include big name customers spending small dollars) but at scale - maybe 1m+ spend a month – private cloud economics dominate. Not to mention all the other benefits. Many believe my thinking is flawed – I haven’t accounted for all the hidden costs of private cloud, the capex is hard to procure etc. I have a lot of data points now suggesting that there is at least something to my theory.
Maybe they are right but I can tell you that MetaCloud and SwiftStack are clearly showing there is a value proposition and enterprises are buying OpenStack and Swift. One of the great things about the enterprise is that markets are rarely “winner take all” like the wed (Google, Facebook) – in fact, its hard for me to name a company other than Microsoft that has really singularly dominated in IT. Maybe IBM in the 80’s.
I can’t wait to see friends next week in Atlanta at the OpenStack summit. This will be my 3rd year going to the summit and speaking. At my first summit, I didn’t see another venture investor but I suspect there will be many there this year. I hear the summit is expecting more than 4,000 people. AWS had something like 8,000 attendees. VMworld had maybe 23,000. OpenStack is real.
But OpenStack is far from perfect but its working, better than ever, and its the best alternative to a public turnkey experience with AWS or costly lock in with VMware. Its going to be a huge success over time – nobody moves production applications without careful consideration so it will take time. As I look back over the last 3 years, the arc of private cloud is clearly pointing to OpenStack. I am hoping to invest more in the OpenStack ecosystem.
(Thanks @stu @wikibon for helping with the conference numbers)