Category Archives: OpenStack

Cisco Is Shutting Down Its Public Cloud, Exploring Hybrid IT Strategy

Cisco just confirmed it’ll shut down its Intercloud by March 2017. Intercloud was supposed to be Cisco’s move in public cloud, addressing both businesses and service providers. But Cisco learned the painful lesson of the cloud, same lesson learned by HPE which shut down its Helion public cloud a year ago and Verizon which shut down its cloud earlier this year. On its statement, Cisco explained:

Cisco has evolved its cloud strategy from federating clouds to helping customers build and manage hybrid IT environments.

It appears Cisco realized that hybrid cloud may be its answer to Amazon, Microsoft and Google. It may have learned from Rackspace, which abandoned its cloud product and turned to partnering with Amazon, a strategy shift which paid off big time a few months ago. VMware is another datacenter giant that realized it’d better off partnering with Amazon for cloud services, and announced partnership a couple of months ago.

With open source taking over networking, Cisco foresees rough times also on traditional networking side. The big guys go as far as building their own datacenters from the ground up from simple hardware, skipping Cisco’s expansive purpose-built high-end boxes.

While many abandon their public cloud aspirations, it’s interesting to see that last month Oracle launched bare metal cloud services, which is in fact just the first step of its new cloud strategy announced back in September. Will it succeed where the others have failed?

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Rackspace Cashes Out On Its Hybrid Cloud Strategy, Acquired by Private Equity

Cloud Computing company Rackspace will be acquired for $4.3 billion by private equity firm Apollo Global Management. Deal is expected to close in Q4 2016 and Rackspace stockholders to receive $32.00 per share in cash (a nice a premium of 38% on Rackspace’s stock price).

This acquisition is a clear sign of success for Rackspace’s change of strategy, whereby Rackspace eased off on its own cloud and managed services, and started offering third-party support for the public clouds of Amazon and Microsoft. This change of strategy started showing clear positive impact on its financial results earlier this year (see this post from 2 months ago), which sent the right investor signals and paved the way to this acquisition.

For more details on the acquisition see here.

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Can Hybrid Cloud Present An Alternative To Amazon, Microsoft, Google?

It’s not easy to be a public cloud vendor these days. The public cloud world has been undergoing serious consolidation in the past few years. Amazon, the pioneer of the cloud, has been keeping a clear lead, while Microsoft and Google have been pulling in, utilizing their accumulated experience, global data centers and software platforms, and positioned themselves as next in line. Together this trio serve the vast majority of the workloads running on public cloud.

This consolidation drove out many vendors, including some big incumbent names such as HP that shut down its cloud late last year and Verizon that did the same a couple of months ago.

hphelion2

So what’s their answer? I’d say it’s threefold:

  1. Multi-cloud model: If you can’t beat them, join them. Support Amazon, Microsoft, Google public clouds. If done via a good generic platform, it can help avoid vendor lock-in.
  2. Hybrid model: mix the public cloud support with support for private cloud and bare-metal to offer public-private-hosted hybrid approach.
  3. Private model: concentrate on strictly private cloud. The popular open-source project OpenStack is a leading candidate for this strategy. This approach is useful for the customers insisting to run things on their own premises.

HP (now HPE), after shutting down its public cloud, moved to a hybrid cloud strategy with a series of acquisitions and by endorsing OpenStack private cloud open source project.  Verizon went for the private cloud approach.

An interesting case is Rackspace, which eased off on its own cloud and managed services, and started offering third-party support for the public clouds of Amazon and Microsoft, leveraging its Fanatical Support brand. Also, in parallel to supporting leading public cloud vendors, Rackspace keeps its longstanding support of private cloud deployments based on OpenStack, the popular open-source platform which it co-founded.

rackspace-multi-cloud-offering

Rackspace’s strategy seems to have hit well. quarterly results published this week show quarterly revenue $518 million, up 7.9% from the year-ago-quarter. Executives noted Rackspace’s success was buoyed particularly by a growing number of Fanatical Support customers for its Microsoft Azure and Amazon Web Services (AWS) offerings as well as customers on its OpenStack private cloud.

Hybrid cloud strategies gain traction with enterprises. While Amazon, Microsoft and Google try to convince enterprises to go all-in on the public cloud, it’s too big a change to swallow for most. Even Microsoft realized that hurdle and tried bringing its Azure cloud to the enterprise’s datacenter. Hybrid cloud seems to have demand, and may also be the focus of those who failed to take the lead in the public cloud.

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Virtual networking picks up at OpenStack

Virtual networking was a key theme at this week’s OpenStack Summit in Paris. We saw keynotes addressing it, panels with leading Telco experts on it, and dedicated sessions on emerging open standards such as OpenNFV.

Telco inherently posses more challenging environments and networking needs, with elaborate inter-connectivity and service chaining, which the Neutron project has not yet adequately addressed. We also see open standards emerging in the industry around SDN and NFV, most notably OpenDaylight, which OpenStack foundation still haven’t decided how to address in collaboration and complementary fashion. It would become even trickier in light of competing open standards such as the ON.Lab’s Open Network Operating System (ONOS) which was announced just this week.

This lack of standardization in SDN & NFV for OpenStack presents an opportunity for different vendors to offer an open source solution in attempt to take the lead in that area, similarly to the way Ceph took the lead and ultimately became the de-facto standard for OpenStack block storage. On this week’s summit we saw two announcements tackling this gap of SDN for OpenStack: both Akanda and Midokura announced their open source products in compatibility with OpenStack.

Midokura decided to open source it’s core asset MidoNet which provides Layer-2 overlay aiming to replace the default OVS plugin from OpenStack. Midokura is targeting OpenStack community, making its source code available as part of Ubuntu’s OpenStack Interoperability Lab (OIL). OpenStack is also clearly targeted in their announcement:

MidoNet is a highly distributed, de-centralized, multi-layer software-defined virtual network solution and the industry’s first truly open vendor-agnostic network virtualization solution available today for the OpenStack Community.

Akanda on the other hand was an open-source project from the beginning. Akanda focuses on Layer-3 virtual routing on top of VMware NSX’s Layer 2 overlay, with support for OpenDaylight and OpenStack. In fact Akanda is a sort of a spin-out of DreamHost, the company that spun-out Inktank and brought about Ceph (acquired by RedHat in April). Will they be able to achieve same success with Akanda in Networking as they did with Ceph in Storage?

Telco operators such as AT&T, Huawei and Vodafone are pushing the OpenStack Foundation and community to address the needs of the Telecommunications domain and industry. The OpenStack framework has reached enough maturity in its core projects and ecosystem to be able to address the more complex networking challenges and requirements. Backed by the network operators and network equipment providers (NEPs), and with the right collaboration with other open-source projects in the SDN and NFV domains, I expect it shall be on the right path to offer a leading virtualization platform for Telco and Enterprise alike.

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OpenStack is getting a hug from VMware and Eucalyptus

What’s OpenStack position in the market?

OpenStack traditionally had competition from both well-established closed-source vendors and other open-source initiatives. Time has passed, and the cloud world has matured. So how is OpenStack doing now?

Want to know how a certain company is positioned in the market? Check what its competitors are saying (and doing) about it. Business analysis 101. So let’s examine a couple of competitors from the closed-source and the open-source fronts, including some very recent announcements.

The closed-source enterprise front: VMware

One of OpenStack’s fierce rivals on the enterprise virtualization domain is VMware. VMware has established its reputation in server virtualization and gained foothold in all major enterprises, which gave it clear leverage when offering private cloud for the data center.

Nonetheless, VMware could not afford to ignore the OpenStack wave and has been keeping presence in the foundation, including active code contributions to the main OpenStack projects and a community page around their integration.
Then they decided to hug OpenStack even closer.
A couple of days ago, during VMWorld 2014 conference, VMware announced its own OpenStack distribution, dubbed “VMware Integrated OpenStack”. VMware says it is

a solution that will enable IT organizations to quickly and cost-effectively provide developers with open, cloud-style APIs to access VMware infrastructure.

VMware even launched a new blog dedicated for OpenStack where VMware appeals for developers based on its reputation with developer tools and frameworks, as well as enterprise experience, promising to be the agile way to develop OpenStack in enterprise grade.

Team+OpenStack+@+VMware[1]

The open-source community front: Eucalyptus

VMware is not the only player to recognize OpenStack’s lead position. Eucalyptus is another open-source initiative that competed with OpenStack in its early days on the hearts of the OSS community. One of its strategic moves was to partner with Amazon to provide AWS-compatible API, to enable hybrid cloud deployments.

A couple of weeks ago Eucalyptus CTO Marten Mickos, the guy who compared OpenStack to the Soviet Union, surprised everyone by stating in his blog that he wants nothing short of to be an OpenStack contributor. Yes, you heard me right, Eucalyptus wants to help the enemy. In his post he explains the rationale:

I want OpenStack to succeed. When that happens, Eucalyptus can also succeed. OpenStack is (in my humble opinion) the name of a phenomenon of enormous proportions. Eucalyptus is the name of a tightly focused piece of software that serves a unique use case. I am intent on finding and pursuing a mutual benefit.

Seems like Eucalyptus bets on the complexity of OpenStack and tries to position itself as a less broad but simpler solution. If you ever tried installing and configuring OpenStack on your environment you’d know that this approach can make a lot of sense. The system integrators sure monetize on that. It would be interesting to see the reactions to Marten’s message in the OpenStack Silicon Valley event next month.

If you can’t beat them, join them

Things look good for OpenStack. Prominent closed-source competitors as well as open-source competitors are coming to the realization that OpenStack is becoming the de-facto standard for private clouds, and are now embracing OpenStack and are trying to position themselves as complementary. The game is not yet over. There are still vendors, both closed-source enterprise shops such as Microsoft Azure, and open-source, primarily CloudStack (some would argue also OpenNebula), still giving a fight. Things also differ in different regions. But in my view the recent announcements of past weeks are a good evidence in favor of OpenStack.
Who’s next in line to hug OpenStack?

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