A couple of weeks ago I attended my first OpenStack Summit in Hong Kong. It was an eye opener experience from a research standpoint, and I wrote some of my impressions in a post titled “What I saw at the OpenStack Summit” . In that post I covered three big a-ha moments for me, but omitted one.
What I saw at the Summit was a very strong desire to penetrate the enterprise market, which seems to be the hardest challenge for vendors gravitating around the OpenStack ecosystem. In fact, for the largest part, vendors don’t know how to articulate the OpenStack story to win enterprises. They simply don’t know how to sell it.
Don’t believe the hype generated by press and vendor marketing: OpenStack penetration in the large enterprise market is minimal. There are exceptions, like the way too famous PayPal case study. But PayPal is not your average large bank, your average large insurance firm, or your average healthcare organization. If you look at the excellent User Story page on the OpenStack website, you’ll see a lot of documented customer references, but not the traditional enterprise segment that vendors are after.
And yes, there are some ongoing deployments that can’t be disclosed yet, but for one promising or successful deployment there are several that fail and that will forever remain undocumented. When I evaluate a case study in Gartner I always assess what’s the stage of the project. If the project just started I don’t really know if the interviewed organization will fail and replace the product six months into the implementation. Sometimes it happens, demonstrating how a lot of the initial assumptions were wrong.
So why vendors can’t tell a resonating story about OpenStack to enterprise prospects?
There are at least four reasons:
1) Lack of clarity about what OpenStack does and does not.
Over the last three years, press mistakenly positioned OpenStack as an alternative to commercial solutions that in Gartner we call cloud management platforms (CMPs). In most situations, it’s not the case. Quite the opposite, from an architectural and functional standpoint, what OpenStack does must be augmented by a commercial CMP for many enterprises that need strong process governance, sophisticated capacity management, and advanced automation capabilities. I spent the last three years at Gartner researching on these topics, but you don’t have to trust my words. eBay’s Chief Engineer in charge of the OpenStack private cloud, Subbu Allamaraju, says it better:
“However, OpenStack is a cloud controller software. Though the community did a nice job at putting together this software, an instance of an OpenStack installation does not make a cloud. As an operator you will be dealing with many additional activities not all of which users see. These include infra onboarding, boostrapping, remediation, config management, patching, packaging, upgrades, high availability, monitoring, metrics, user support, capacity forecasting and management, billing or chargeback, reclamation, security, firewalls, DNS, integration with other internal infrastructure and tools, and on and on and on. These activities are bound to consume a significant amount of time and effort. OpenStack gives some very key ingredients to build a cloud, but it is not cloud in a box.”
It is totally acceptable that press cannot get the architectural and functional difference between OpenStack and commercial CMPs focused on private cloud computing. But vendors get this difference, trust me. And no one in three years stood up to clarify what OpenStack can and cannot do for an enterprise. The net result is that the large majority of my inquires with enterprises interested to learn more about OpenStack are focused on clarifying architecture and feature set versus solutions like VMware vCloud Suite or BMC Cloud Lifecycle Management.
To the contrary, all vendor marketing seen in last three years seems focused on building a very vague association between OpenStack and the general concept of “cloud”. Nobody acknowledges that OpenStack can solve a specific set of problems related to building a cloud, but not all of them. I won’t make specific examples, but I invite readers to open a multi-tab browser and display the OpenStack page of various Foundation members for each tab.
Enterprises don’t do business with vendors that cannot articulate clearly their value proposition describing what problem they solve and why they solve it better than others.
I look forward to address this lack of clarify from a technical standpoint with my next research document.
2) Lack of transparency about the business model around OpenStack.
During the press and analyst day at the OpenStack Summit I was fortunate to attend a panel with prominent vendors about their involvement in the project. One of the first questions, if not the first, submitted by the moderator was something like “You offer commercial solutions to build private clouds, and yet you are investing significant resources in this open source project. Why?”
What followed was the closest thing to a discourse at a philanthropy dinner I have ever heard in my life. Not a single panelist described the business model behind their decision to support OpenStack.
I have no doubts that some individuals truly believe in the promise of OpenStack and its long term potential (for example, one thing that was mentioned was greater cloud interoperability). However, vendors gravitate around OpenStack for profit, which can come in different forms:
- Some vendors can benefit from OpenStack’s complexity by selling professional services
- Some vendors can benefit from OpenStack’s lack of enterprise-grade functionalities and augment an OpenStack cloud with their commercial CMPs
- All vendors benefit from OpenStack’s open source nature by offering enterprise-grade support well beyond the 6-months life cycle of OpenStack releases.
- All vendors benefit from OpenStack’s open source nature by leveraging drivers for the various resource managers provided by other vendors, rather than developing their own integration points. It’s a massive R&D cost that is offloaded to the OpenStack community.
None of these business models were even briefly mentioned, and that reflects the reticence that vendors have in clarifying why they want to be in the OpenStack business.
Enterprises need to understand the long term viability of technologies they consider for adoption. An unclear business model doesn’t help.
3) Lack of vision and long term differentiation.
I mark some of my slide decks as “evergreen”. It means that I keep updating them even if there’s no imminent research document associated to them, simply because they are about a topic that comes up every day during inquiries. One of my evergreen decks describes the cloud management platform market profile and vendor segmentation. In that deck I keep track of commercial CMPs and OpenStack distributions among other information. And to my count, at today, there are 17 OpenStack distributions. I am fairly certain there are more.
What value they add to the vanilla OpenStack code that enterprises could (but don’t want to) download by themselves? What is the differentiation between all these distributions?
For way too many, it’s all about number of code contributors and simplifying the installation process, in this exact order.
Number of code contributors doesn’t tell anything about vendors’ vision and long term differentiation. How many developers contribute to a commercial CMP? Does it matter if the product doesn’t solve today’s and tomorrow’s needs an organization has? Andrew Clay Shafer, former VP of Engineering at CloudScaling (an OpenStack Foundation Gold Member), called it vanity metrics. I agree and invite technical press to dig deeper in writing their stories about OpenStack.
OpenStack installation issues is nothing new, and it’s somehow shocking that three years into the project the code is still so complex to install. So it’s positive that vendors are working to solve the problem. However, you can’t win enterprises with a smoother installation procedure. Did you ever install VMware vCloud Suite? Or BMC Cloud Lifecycle Management? Or Cisco Automated Suite for Clouds? Or Microsoft System Center? Or IBM SmartCloud Orchestrator? Or HP Cloud Service Automation? Or CA Automated Suite for Cloud? Most of these commercial CMPs are massively complicated multi-tier systems. In some cases, the vendor requires professional services even just to deploy them. Yet, large enterprises keep buying (some of) them to build their private clouds. Enterprise organizations demand software simplification, but if a smoother installation process is the only value an OpenStack vendor can provide that’s not really impressive.
When large enterprises decide to build a private cloud, they commit to a long and complex, multi-year, often million-dollar implementation. Accordingly, organizations evaluate the long term viability (i.e., Acquisition? Bankrupt? Radical change of the go to market strategy?) of their vendor of choice, if and how a vendor’s vision aligns with internal business goals, and if the technology roadmap will likely support their evolving needs over the many phases of the project.
Enterprises don’t buy a long term vision articulated around how great the software setup is and how many code commits you are responsible for.
4) Lack of pragmatism.
In my previous blog post, I described how OpenStack vendors divide into two camps that I called “purists” and “pragmatists”.
Purists keep telling enterprise prospects that OpenStack can’t be a general purpose cloud environment, able to host traditional multi-tier LoB applications as well as new cloud-aware applications. “Either your application can scale out or you are stuck in a VMware world”, I was told at the Summit. This, admittedly small, faction is the one that ignores how many large enterprises keep calling Gartner asking clarifications about what OpenStack is and how they could leverage it to reduce their dependency from VMware. This faction also ignores how incredibly hard and time consuming is for an enterprise organization embrace cloud design patterns.
Ironically, this faction includes players that waste no time in criticizing established virtualization or enterprise management vendors for not offering “true” cloud solutions. However, enterprise clients continue to buy “non-true” cloud solutions and OpenStack adoption in this market segment remains minimal.
Enterprises don’t particularly like vendors that show lack of awareness about the technical, organizational, cultural and political issues that plague their environments. How can these vendors be good business partners?
There are other, significant reasons why enterprises don’t buy OpenStack. I’ll talk about the technical issues in my upcoming research paper. The above are the ones why vendors can’t even get the attention they hope for.
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