by Swapnil Bhartiya

Reports of OpenStack’s death are greatly exaggerated

News Analysis
May 11, 2017
Cloud ComputingOpen Source

Contrary to the reports of demise of OpenStack, this open source project is growing at an unprecedented rate.

Jonathan Bryce, executive director of the OpenStack Foundation, opened his keynote at the OpenStack Summit with a tweet from 2013 that read, “OpenStack is as good as dead.” 

If you have been following the private cloud space, you’ve likely come across articles professing the demise of OpenStack.

But OpenStack is very much alive and experiencing explosive growth.

According to the recent OpenStack User Survey, Bryce said, OpenStack deployments have grown 44 percent year-on-year. More than half of Fortune 100 companies are running OpenStack. The stats from around the globe are even more encouraging. There are five million cores of compute power, across 80 countries, that are powered by OpenStack. What’s even more impressive is that two-thirds of all these deployments are in production.

This is organic growth of OpenStack and there are many factors behind this growth. To understand this growth we need to step back and look at the evolution of the technology and its adoption.

The first generation of private cloud

Bryce said that the first generation of private cloud, from the technology perspective, was focused on compute virtualization. If we look at it from the adoption perspective it was targeted at hyper-scale workloads.

In the early days, companies like Rackspace, Yahoo!, eBay and PayPal were using this maturing technology on a massive scale. The focus was solely on very large environments.

But as OpenStack matured and everything became virtualized, including compute, networking and storage, the technology broadened its user-base.

As the community grew, OpenStack broadened the addressable market as it allowed things that public cloud couldn’t or wouldn’t handle at that time. One such area was geographical needs for data sovereignty that lead to creation of public clouds running on OpenStack. According to estimates there are over 30 public clouds around that globe that run on OpenStack.

Bryce identified three core components that contributed to the adoption of OpenStack: Compliance, Cost and Capability.

Compliance: Private cloud seems to be the only option when you think of compliance, but there are use cases where companies like Citi Network who built a public cloud with OpenStack, yet kept it compliant with the European Union.

Cost: Bryce said that while public cloud does allow companies to get started for cheap, it becomes expensive in the long term. He said there are companies who now want to move their long running environments to a workload where they see long term cost benefits. Companies like Adobe TubeMogul, PubMaticTapjoy, and Snapdeal have moved their workloads from public cloud to OpenStack powered private cloud. Snapdeal disclosed that they achieved 75 percent cost savings on their infrastructure by moving to private cloud. Just imagine how much you can do if you invest that 75 percent into your product and not infrastructure!

Capabilities: Public cloud are adding new capabilities, but they can’t keep up with an open source project where the stakeholders can add capabilities that they need, which also means deployment in areas where public cloud can’t serve. Bryce gave the example of Square Kilometer Array where they were moving petabytes of data per day, that’s just not possible with public cloud.

Going beyond the cloud

Being an open technology, OpenStack is allowing users to broaden its scope by adding new capabilities. As a result, OpenStack is going beyond building massive cloud, it has found a stronghold in telcos. Network virtualization function (NVF) is emerging as the fastest use-cases where companies like AT&T are building their future networks on OpenStack.

“AT&T alone is already supporting customers with OpenStack in nearly 100 data centers, alongside carriers like Verizon, China Mobile, and Deutsche Telekom. In terms of sheer footprint, OpenStack is the most widely distributed cloud infrastructure for virtualized networks, and the Vodafone deal is the most recent example,” said Bryce. EDGE computing is another emerging market for OpenStack and Verizon is betting big on it.

Second generation of private cloud

All of these use-cases are still about building massive infrastructure, massive cloud. Now, private cloud is entering second generation and it can be attributed to two core components: technology and adoption.

From a technology standpoint if the first generation private cloud was focused on compute virtualization, the second generation has everything virtualized – compute, network and storage. We are also seeing the emergence of new technologies like OpenShift, Kubernetes, Cloud Foundry that complement OpenStack and make it much more easier for customers to deploy private cloud, compared to early days where getting started with OpenStack was extremely difficult.

This ease of deployment and management has also brought a major shift in adoption and consumption of OpenStack. Now people are running OpenStack on a much smaller scale to achieve cost savings, while maintaining total control over their cloud.

Bryce pointed out the OpenStack user survey where they found an even distribution of OpenStack usage among really huge companies, medium sized companies and very small companies.

OpenStack ecosystem has found a new business model to cater to new breed of users and customers. But new opportunists bring new challenges.

That’s now changing. “The same companies now are moving beyond single focus and saying that they need a range of options,” said Bryce.

Companies are now using a mix of public cloud, private cloud and managed private cloud. Bryce pointed out a Forrester report that said internal private cloud accounts for 33 percent, public cloud accounts for 32% and hosted private cloud accounts for 35 percent.

What’s interesting is that internal private and hosted private accounts for over 60 percent of the market and that’s where the OpenStack community has a lot of deployments and offerings.

“One of the shifts that we have seen with second generation private cloud is the emergence of a new consumption model that has been gaining traction. It’s remotely managed private cloud,” said Bryce. “It’s private cloud that is dedicated to you but it’s delivered as a service. It can be on your premise or on a provider’s premise. So you get the power, the long term cost savings and the customization of a private cloud but without being responsible for the operational model around it.”

To capture this emerging market, OpenStack has added a new category to its marketplace to showcase the remotely managed private cloud offerings so that customers and users can easily choose their provider.


It’s quite evident by now that far from dying, OpenStack is actually enjoying sustainable growth, it’s creating new business opportunities. That said, we can’t fully ignore the fact that OpenStack is also going through some consolidation.

Many companies got on board the OpenStack bus at a very early state. Companies need to invest in new technologies, they need to explore business opportunities or they will cease to stay relevant.

But as the OpenStack ecosystem matures, a few companies recognized that their own expertise and business models can’t add any real value to the ecosystem and they pulled out.

At the same time there were companies that succeeded in building expertise and products around OpenStack. Today there is a massive ecosystem around OpenStack and with the second generation of private cloud it’s going to grow even bigger.

This consolidation is a natural and healthy process as OpenStack is now left with those stakeholders who are committed to OpenStack, who have real expertise and a sustainable business model around it. The result is a more refined, mature and sustainable future for OpenStack.