Consolidation and Breakups May Loom in the OpenStack Arena

by Ostatic Staff - Oct. 07, 2014

Are there now too many OpenStack distributions and services to be sustainable? Only a few months ago, analysts at Forrester Research were saying that the clock was ticking on delivery of viable OpenStack services, and Citrix officials have repeatedly made the point that there is much more press and hubbub surround the open cloud computing platform than there are deployments.

Big players like HP and Oracle are squaring off with smaller companies like Red Hat, Rackspace and Mirantis. Meanwhile, there are some reports that existing deals surrounding OpenStack services won't last. Among these reports, Forbes notes that a divorce between Mirantis and Red Hat could be imminent.

According to Forbes, citing a GigaOM report:

"A case in point is the Series A funding round of OpenStack vendor Mirantis. That deal saw Red Hat participate in the funding, only a few months before they acquired Mirantis competitor eNovance. Now it would seem that things are growing uncomfortable. GigaOm reported, citing unnamed sources, that Mirantis wants to extricate itself from the deal."

 In October 2013, five months after the Red Hat investment, Mirantis unveiled its own enteprise OpenStack distribution, and support services.

Whatever the facts in that relationship are, there are now so many distributions of OpenStack and so many surrounding support plans that some businesses could become confused. It's inevitable that we'll see some shakeout.

As IT World has reported:

"Enterprises like competition for services. They’d rather pit vendors against each other since that drives prices down and innovation up. But we’ve all seen what happens when a hot new market segment emerge. Startups and established companies flock to it, followed by a shake out after which only the strong survive."

 To win business in a market that revolves around an open source platform like OpenStack, service providers will need to differentiate their support offerings and much more.

Some of the more experienced players are offering useful extensions for OpenStack deployments, such as RackSpace's OpenCenter, which serves as a useful, graphical dashboard for managing cloud services. 

But there are generally a lot of players offering very similar services. In the end, this will cause support to be the big differentiator. That could favor companies like Red Hat that have made a business out of emphasizing support.

It seems almost guaranteed, though, that in a few short years we'll see fewer than half the number of OpenStack service providers as there are now. Meanwhile, existing agreements surrounding OpenStack may not be built to last.