Build or Buy? – The CIOs OpenStack Dilemma

OpenStack has become the most important open source project for cloud infrastructure solutions. Since 2010, hundreds of companies are participating in order to develop an open, standardized and versatile technology framework, which can be used to manage compute, storage and networking resources in public, private and hybrid cloud environments. Even though OpenStack is an open source solution, this does not imply that the setup, operation and maintenance are easy to handle. OpenStack can behave like a true beast. A number of CIOs who are running self-developed OpenStack infrastructure are reporting significant increases in cost and complexity. They have made several fine-tunings to fit OpenStack to their individual needs, developing OpenStack implementations that are no longer compatible with the current releases. This leads to the question whether a build or buy strategy is the right approach in deploying OpenStack in the captive IT environment.

OpenStack to gather pace

OpenStack has quickly become an essential factor in the cloud infrastructure business. Started in 2010 as a small open source project, the solution is used by hundreds of enterprises and organizations in the meantime including several big companies (PayPal, Wells Fargo, Deutsche Telekom), as well as innovative startups and developers. In the early days its initiators used OpenStack to build partly proprietary cloud environments. More than 850 companies are now supporting the project, among them IBM, Oracle, Red Hat, Cisco, Dell, Canonical, HP and Ericsson.

Note: The numbers are based on the official statistics of the OpenStack Foundation.

Alongside the continuous improvement of the technology, the adoption rate accordingly increases. This can be seen in the worldwide growth of the OpenStack projects (increase by 128 percent in 2014, Q1 (105) –> Q4 (239)). Here, on-premise private clouds are by far the preferred deployment model. In Q1 2014, the OpenStack Foundation counted 55 private cloud installations worldwide. In Q4, the number grew to 130. For the next 12 months, Crisp Research expects a 25 percent growth for OpenStack based enterprise private clouds.

OpenStack: Build or Buy?

OpenStack offers capabilities to operate environments in synergy with a variety of other open source technologies and at the same time to be cost-efficient (no or only minor license costs). However, the complexity level in this case increases dramatically. Even if CIOs tend to use OpenStack only as a cloud management layer, there is still a high degree of complexity to manage. Most of the OpenStack beginners are not aware that OpenStack has more than 500 buttons to configure OpenStack clouds the right way.

The core issue for most of the companies who want to benefit from OpenStack is: Build or Buy!

During the preparation and evaluation of the build or buy decision companies should absolutely consider the in-house experiences and technical knowledge with respect to OpenStack. IT decision makers should bring the internal skills into question and clearly define their requirements in order to compare them with the offerings of OpenStack distributors. Analogous to the Linux business, OpenStack distributors offer ready bundled OpenStack versions including support – mostly with integration services. This reduces the implementation risk and accelerates the execution of the project.

The CIO is in demand

For quite some time, CIOs and cloud architects are trying to answer the question of how they should build their cloud environments in order to match their companies’ requirements. After the last years had been used for “trial and error” approaches and most of the cloud infrastructures had an exploratory character, it is about time to implement large-volume projects within the production environments.

This raises the question which cloud design is the right one that IT architects can use to plan their cloud environments. Crisp Research advises to build modern and sustainable cloud environments based on the principles of openness, reliability and efficiency. Especially in the areas of openness and efficiency OpenStack can make a significant contribution.

The complete German analyst report “Der CIO im OpenStack Dilemma: BUY oder DIY?” can be downloaded under

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.