Cloud Computing

The impact of OpenStack for the cloud sourcing

In 2014 German companies will invest around 6.1 billion euro in cloud technologies. Thus, cloud sourcing is already seven percent of the whole IT budget. For this reason the importance of cloud ecosystems and cloud marketplaces are getting a higher significance in the future.

Crisp Research predicts the amount of cloud services that are traded using cloud marketplaces, platforms and ecosystems of around 22 percent until 2018. However, the basic requirement for this is to eliminate the current weak spots:

  • The lack of comparability,
  • Minor transparency,
  • As well as a poor integration.

These are elemental factors for a successful cloud sourcing.

Openness vs. Comparability, Transparency and Integration

In bigger companies the cloud sourcing process and the cloud buying center are dealing with a specific complexity. This is due to the challenge that the cloud environment is based on several operation models, technologies and vendors. On average smaller companies using five vendors (e.g. SaaS). Big and worldwide distributed companies are dealing with over 20 different cloud providers. On the one hand this shows that hybrid and multi cloud sourcing is not a trend but reality. On the other hand that data and system silos even in cloud times are an important topic. But, how should IT buyer deal with this difficult situation? How could a dynamic growing portfolio be planned and developed in the long-term and how is the future safety guaranteed? These are different challenges that should not be underestimated. The reason is obvious: Over the last years neither cloud providers nor organizations or standardization bodies were able to create mandatory and viable cloud standards.

Without these standards clouds are not comparable among themselves. Thus, IT buyer had a lack of comparability. On the technical as well as on the organizational level. In this context contracts and SLAs are one issue. More difficult and chancier it is becoming in the technical context. Each cloud infrastructure provider has its own magical formula on how the performance of a single virtual machine is composed. This lack of transparency leads to a bigger overhead for IT buyer and increases the costs for planning and tendering processes. The IaaS providers are fighting out their competition on the back of their customers. Brave new cloud world.

Another problem is the bad integration of common cloud marketplaces and cloud ecosystems. The variety of services on these platforms is growing. However, the direct interaction between these different services within a platform was neglected. The complexity increases when services are integrated across infrastructure, platforms respectively marketplaces. Today, without a big effort deep process integration is not possible. This is mostly due to the fact that each closed ecosystem is cooking one’s own meal.

Standardization: OpenStack to set the agenda

Proprietary infrastructure foundations could have an USP for the provider. However, at the same time they are leading to a bad interoperability. This leads to enormous problems during the use across providers and increases the complexity for the user. Thus, the comparison of the offerings is not possible.

Open source technologies are putting things right in this situation. Based on the open approach several providers are taking part in projects in order to push the solution and of course to represent the own interests. Therefore it turns out that an audit authority is necessary to increase the distribution and adaption. The benefit: If more than one provider is using the technology, this leads to a better interoperability across the providers and the user is getting a better comparability. In addition, the complexity for the user decreases and thus the effort during the use across providers – e.g. the setup of hybrid and multi cloud scenarios.

A big community of interests, where well-known members are pushing the technology and using it for their own purposes, is leading to a de-facto standard over time. This is a technical standard, which is “[…] may be developed privately or unilaterally, for example by a corporation, regulatory body, military, etc.”

How this works the open source project OpenStack shows impressively. Since its start in 2010 the framework for building public and private cloud infrastructures is getting a lot of attention and has a big constant momentum. By now OpenStack is the foundation of several public cloud infrastructures and product portfolios, among others Rackspace, HP, IBM, Cisco and Oracle. But also many enterprises have discovered OpenStack for their private cloud environments, e.g. Wells Fargo, Paypal, Bloomberg, Best Buy and Walt Disney.

Because of the open approach as well as the continuous development by the huge and potent community (every six month a new version is released) OpenStack is a reliable and trustable partner for IT infrastructure manager. Professional distributions are helping to increase the footprint on the user side and make sure that more and more IT decision maker of bigger companies are building their cloud infrastructure based on OpenStack in the future.

This positive development also arrived in Germany. The results of a current Crisp Research study (“OpenStack im Unternehmenseinsatz”, German) show that almost 50 percent of the cloud users know OpenStack. Already 29 percent of the cloud users engage actively with OpenStack.

The OpenStack ecosystem is still getting bigger and thus pushing the standardization in the cloud. For this reason, IT buyers are getting a better scope while purchasing cloud resources from several providers. But they should keep in mind that their IT architects would entirely separate more from the underlying infrastructure in the future to move applications and workloads on demand across providers. Container technologies like Docker – supported by OpenStack – are pushing this trend.

Think across marketplaces

Cloud marketplace provider should act in terms of their customers and instead of using a proprietary technology also set on open source technologies respectively a de-facto standard like OpenStack. Thus they enable the interoperability between cloud service provider as well as between several marketplaces and creating the requirements for a comprehensive ecosystem, in which users are getting a better comparability as well as the capabilities to build and manage truly multi cloud environments. This is the groundwork to empower IT buyer to benefit from the strength of individual provider and the best offerings on the market.

Open approaches like OpenStack are fostering the prospective ability to act of IT buyer across provider and data center borders. This makes OpenStack to an important cloud-sourcing driver – if all involved parties are admitting to a common standard. In terms of the users.

By Rene Buest

Rene Buest is Gartner Analyst covering Infrastructure Services & Digital Operations. Prior to that he was Director of Technology Research at Arago, Senior Analyst and Cloud Practice Lead at Crisp Research, Principal Analyst at New Age Disruption and member of the worldwide Gigaom Research Analyst Network. Rene is considered as top cloud computing analyst in Germany and one of the worldwide top analysts in this area. In addition, he is one of the world’s top cloud computing influencers and belongs to the top 100 cloud computing experts on Twitter and Google+. Since the mid-90s he is focused on the strategic use of information technology in businesses and the IT impact on our society as well as disruptive technologies.

Rene Buest is the author of numerous professional technology articles. He regularly writes for well-known IT publications like Computerwoche, CIO Magazin, LANline as well as and is cited in German and international media – including New York Times, Forbes Magazin, Handelsblatt, Frankfurter Allgemeine Zeitung, Wirtschaftswoche, Computerwoche, CIO, Manager Magazin and Harvard Business Manager. Furthermore Rene Buest is speaker and participant of experts rounds. He is founder of and writes about cloud computing, IT infrastructure, technologies, management and strategies. He holds a diploma in computer engineering from the Hochschule Bremen (Dipl.-Informatiker (FH)) as well as a M.Sc. in IT-Management and Information Systems from the FHDW Paderborn.