According to our freshly minted Market Monitor reports, the public cloud computing market is growing at a 29% compound annual growth rate (CAGR), from $5.5bn in 2012 to $31bn in 2018. Over the same period, cloud-enabling technologies (CET) will grow at a 17% CAGR, from $10bn to $28bn. The CET numbers do not include hardware and other technologies that may be part of the non-cloud-related general IT infrastructure market and comprise the foundation and support software for a cloud environment.
For many organizations the choice of cloud platform will be the biggest single strategic choice that enterprise customers make in the next two years, setting the directional choice for their future IT direction and investment. While 36% of respondents already have a cloud platform in production use, 35% will be selecting and deploying a cloud platform for the first time in the next two years or more, and it is not unreasonable to expect that some early adopters will switch horses as the race continues to evolve. As a direct result of its dominance in the enterprise workload virtualization market, and corresponding investment in licensing and expertise, VMware is usually guaranteed a place at the table. However, it is by no means guaranteed a leading position in the cloud platform race that is still very much in its early stages.
OpenStack – the alternative to vendor lock-in?
Quite reasonably, enterprise customers wish to resist the threat and shackles of potential vendor lock-in. Most have been burned before, and they are not willing to go down the same path with strategic choices. VMware is still trying to recover from the ‘vRAM tax’ licensing misstep of 2011. By comparison, the OpenStack Foundation was formed as a joint project between Rackspace Hosting and NASA, and is currently managed by the OpenStack Foundation, a nonprofit corporate entity established in September 2012 to promote OpenStack software and its community. With over 4,600 delegates attending the latest OpenStack summit in Atlanta, the momentum behind the initiative is compelling.
The OpenStack community is garnering a lot of attention in both the end-user and the vendor community, several of which have announced that they are investing over a billion dollars in OpenStack-related initiatives. As a result, OpenStack has already taken the position of the second most likely enterprise cloud platform, and is gaining momentum in what is still a very young market. The journey will be a long one, and enterprises have a long record of taking strategic decisions very carefully. All of these factors will have a significant influence upon which vendors emerge as the victors in the cloud computing market ‘hunger games.’
OpenStack – The alternative to vendor lock-in – or not!
As the OpenStack market potential opens up, the ‘open’ principles of open source seem to be giving way to the ‘red in tooth and claw’ nature of commercial competition. VMware is embracing OpenStack as a framework underpinned by its own ‘enterprise-proven’ proprietary technology. HP has made a play to become the predominant OpenStack provider with its ‘HP Helion’ brand, directly challenging other software vendors. Red Hat, the ‘poster child’ of the enterprise-grade open source community, has been pilloried by the Wall Street Journal for taking an Oracle-like approach to bringing open source technologies to market with a ‘sub-rosa’ attempt to crush smaller OpenStack vendors such as Mirantis.
While it is the nature of commercial competition for these competitive maneuvers to proliferate in the early stages of market evolution, most enterprise professionals are sufficiently cynical from past experiences to be immune to these naïve shenanigans, and they sometimes punish vendors for these marketing missteps. Our research indicates that the OpenStack opportunity is large and gaining significant traction, which encourages aggressive behavior from the combative participants. Aggressive behavior is often a double-edged sword, and vendors should be careful not to cut themselves when playing with the sharp instruments of competitive positioning. As the old Scottish proverb goes, “Never give a sword to a man who can’t dance!”
The ‘wannabe’ OpenStack market leaders need to be cautious and somewhat sophisticated in their competitive machinations, lest they bring the entire house down upon their own heads, and do damage to the very vehicle they are riding toward their own future opportunity.
The tip for participants? Don’t tip yourselves over or you will lose the race. Not only do you have to finish the race to win, but the race itself needs to remain relevant to be worthwhile. Don’t undermine it!
Anecdotal commentary from TheInfoPro respondent community illustrates the sentiments expressed about cloud platform choices, with assessments of OpenStack, its maturity, motivations for adoption, and the pragmatic views held about the strategic nature of these decisions:
- “Conflict between strong focus on OpenStack-based technology and a need to deliver enterprise services in the near term. OpenStack is still years from being ready for the enterprise.” – LE, Education
- Portability with OpenStack is of interest to us due to the portability of workloads. HP and Rackspace are operating their clouds in the OpenStack. Moving from cloud to cloud is also of interest.” – LE, Financial Services
- “The lab likes open source generally. If we can look at the code and modify the code, we like that. We are looking at our own private cloud using OpenStack.” – LE, Public Sector
- “Openware (CloudStack, OpenStack) – will it become so widely spread it forces support from all vendors?” – LE, Education
- “We’re all feeling more pressure to look at OpenStack, but this is all about industry buzz.” – LE, Financial Services
- “Want to deploy OpenStack – I have a cluster using Oracle that I will migrate to OpenStack in 2014.” – LE, Education
- “Cloud management solution as well as OpenStack and open source. A lot of hype in that space. Puppet and Chef. Cloud Forms from Red Hat in management space, and Cloupia. A lot of ’em starting to pop up that seem interesting. VMware.” – LE, Financial Services