Is OpenStack Dead? A Virtualization Practice Perspective…

June 2, 2014

By Bernd Harzogand Mike Norman at

Is OpenStack dead (or rapidly dying)? We ask this question from two perspectives. First, can any OpenStack-based offering be economically competitive with offerings from Amazon, Microsoft, Google, and VMware? Second, can any consortium of vendors produce a viable public cloud offering in competition with vendors who own their own stack and can practice agile development and DevOps on that stack?  

Can OpenStack Public Clouds Be Economically Viable?

In Public Cloud Computing—Economics and Throats to Choke, we first discussed the problem of vCloud’s partners having attempted a cloud offering that was price-competitive with Amazon while paying license fees to VMware. This turned out to be a very serious issue; serious enough to kill the entire vCloud effort and for VMware to replace it with its vCloud Hybrid Service, which offers cloud service directly to the customer. It turns out that it is a great advantage from an economic perspective (affecting cost, which drives the price at which services can be offered) for a public cloud vendor to have complete ownership and control of its stack of software and to owe no license fees. Amazon, Microsoft, and VMware are in this position. Google might be in this position if it is not paying license fees to Red Hat for KVM (whether it is or is not is unknown).

The table below compares the positions of Amazon, Microsoft, Google, VMware, an OpenStack cloud vendor, and Virtustream with regard to stack ownership and competitiveness of price.

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