Where does OpenStack fit in a public cloud world?

Where does OpenStack fit in a public cloud world?

As more companies turn to a hybrid cloud approach, the future looks bright for OpenStack.

Where does OpenStack fit in a public cloud world?
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Public clouds are taking over the world. Every day, more and more companies are moving their infrastructure to services like AWS or Microsoft Azure to save capital and operational costs. This begs the question: Where does this leave OpenStack?

In this post, we'll explore how OpenStack is competing in a market dominated by public cloud providers, and how it is positioned to grow in the future, especially in the hybrid cloud business.

OpenStack is used by companies like Comcast, PayPal, Walmart, Volkswagen, CERN, LexisNexis, AT&T, China Mobile, among many others, and by Her Majesty’s Revenue and Customs in the UK. The market is strong for companies like telcos.

The problem

When OpenStack started to gain popularity, many startup companies tried to compete by offering a solid product based on OpenStack in either the public or private cloud. However, most of these startups failed in the effort or were acquired by bigger companies. Today, OpenStack is almost non-existent in the public cloud market. Between 2015 and 2017, the biggest OpenStack public cloud providers—Cisco, HPE, and GoDaddy—exited the market.

Meanwhile, AWS captured $5.11 billion in revenue in the 2017 Q4 quarter and $17.46 billion in all of 2017.

It’s tough for companies like Cisco, Rackspace, GoDaddy, and HPE to compete against Amazon, Microsoft, or Google in terms of cost, scalability, and resources. AWS was developing and adding new features rapidly, and most of these companies couldn’t keep up. In addition, Amazon kept growing as every day many startups and small and mid-sized businesses made the move. It’s hard to compete with that.

Let’s be honest: The public cloud has simplified life for many IT departments. It set a new benchmark by reducing the time to production and helping enable the rapid innovation that many companies need. Time to provision a server dropped from weeks to minutes. Also, many companies that lacked the resources to pay for a data center or co-location saw significant cost savings.

But not all data or every workload is suited for the public cloud, and that's where OpenStack will probably continue to lead in the foreseeable future. Many companies that jumped onto the public cloud hype are now rethinking their strategy.

An 2016 article in Forbes cites a study conducted by 451 Research that found that 20% of cloud users had moved one or more of their workloads from the public cloud back on premises. There is even a name for this migration: cloud repatriation.

The same study also found that an additional 10% of public cloud users were planning to move some workloads back to a private cloud in the future. In total, those who embarked on cloud repatriation planned to do so with 40% of their current public cloud workloads.

There are many reasons behind this repatriation. First and foremost is security, but other factors include increased control, fear of vendor lock-in, reducing costs, latency, compliance, and even integration with legacy infrastructure.

This brings us back to the main question of this article: Where does OpenStack fit in a public cloud world?

The short answer: hybrid cloud. But there's more to the story.

Today, hybrid cloud is a reality and multi-cloud has become a real possibility. With hybrid clouds, customers can have a mixed pool of resources between multiple public and private clouds. With OpenStack running in the private cloud side of this hybrid implementation, enterprises can avoid vendor lock-in with their cloud infrastructure while also being able to deploy multiple private clouds using a single API at the infrastructure layer.

This is the approach most repatriating companies are looking for.

The future

But OpenStack's future doesn’t stop there. There’s an increasing demand for OpenStack from telecoms as their network function virtualization (NFV) foundation of choice. Network function virtualization is the concept of replacing dedicated network appliances such as routers and firewalls with software running on commodity hardware, like cloud computing.

According to an August 2016 survey conducted by Heavy Reading and the OpenStack Foundation, more than 60% of telecoms are already using, or currently testing, new use cases with OpenStack for NFV, and 86% of telecoms respondents considered OpenStack to be essential or important to their success.

One example is Verizon, one of the biggest telecom companies in the United States, which worked with Big Switch Networks, Dell, and Red Hat to develop an OpenStack pod-based design. This created the industry’s largest-known network function virtualization (NFV) OpenStack cloud deployment across U.S. data centers, adding resiliency at scale with no bandwidth bottlenecks and reduced operational complexity.

Other telecoms running OpenStack are Sprint, Comcast, Ericsson, and China Telecom.

Conclusion

The future of OpenStack is bright in the private cloud, hybrid cloud, and with NFV. Private cloud (or hybrid) is here to stay, and more and more companies are looking for a balanced approach to their cloud migrations that includes integrating private and public clouds.

And as more telecom companies adopt OpenStack for their NFV and the agility and scalability it enables, they are contributing back to the project.

There's no doubt: The future looks strong for OpenStack.

About the author

Michael Zamot - Michael Zamot is an open source enthusiast whose passion began in 2004, when he discovered Linux. Ever since then he has worked and played with various open source projects, including Linux, OpenStack, OpenShift/Kubernetes and many more, and participated in community events by teaching, conducting workshops, and providing technical support and mentorship. He currently works for Red Hat as a Cloud Consultant, designing, deploying, and supporting complex cloud solutions.