OpenStack surge shows growing buzz around private cloud

25 Oct 2016

Clouds. Image: BurAnd/Shutterstock

Should your company go public or private for cloud storage? If OpenStack’s growth is anything to go by, the latter choice is becoming more appealing.

While still a minor player in comparison to VMware or Amazon’s AWS, OpenStack’s predicted growth by the end of the decade is giving strong hints as to where the cloud industry is headed.

According to a new report from 451 Research, companies working to commercialise OpenStack’s service will generate total revenues of $1.8bn this year, $2.5bn in 2017 and over $5bn in 2020.

Not all of this growth is down to private cloud, though 451 Research argues that this is the one area to pin your hat on in future.

Cloud OpenStack

“We continue to believe the market is still in the early stages of enterprise use and revenue generation,” said Al Sadowski, research vice president at 451 Research.

“We expect an uptick in revenues from all sectors and geographic regions, especially from those companies in the OpenStack products and distributions category that are targeting enterprises.”

Jonathan Bryce, OpenStack’s executive director, recently said the reason his company is performing well is due to return on investment. More established public rivals such as Amazon are perceived cheaper at first but, pretty soon, OpenStack excels.

“Within three to four months of building on OpenStack, you can recoup the capital expense and the operating expense is much lower,” he said.

Speaking to The Register, Bryce namechecked Tapjoy as one company that had started on AWS in the development phase, but pulled production workloads onto OpenStack.

However, Bryce didn’t agree with the assertion that public v private is an either or decision, rather one side is growing at a different rate for now, but not forever.

“I don’t see it as a race to slow down public cloud. A lot of OpenStack customers are AWS and Azure users, so it’s a mix of technologies,” Bryce said.

OpenStack is currently benefitting significantly from the availability of complementary container software, such as Docker, according to 451 Research.

However, the success of Docker in particular shows a chink in the armour of OpenStack, with its capabilities offering a substitute to OpenStack in general, posing problems in future.

“This year OpenStack has become a top priority and credible cloud option, but it still has its shortcomings,” said Sadowski.

Gordon Hunt was a journalist with Silicon Republic