8 years ago

The Astounding Growth of the OpenStack Market

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Oracle OpenStack, which is based on OpenStack Kilo, offers all the services that you need to build your cloud infrastructure.

OpenStack is an open-source set of tools that helps you build and manage cloud computing platforms. You can use OpenStack to get a handle on both private and public clouds for free.

When OpenStack first came out, vendors and users focused more on coming up with services that help build and design private clouds used for DevOps and big data. However, more and more companies eventually started using OpenStack. This paved the way for more vendors that started offering products and managed services to help users with their OpenStack deployments.

Today, most of the top companies in every industry rely on OpenStack for their private clouds, especially for very important services and applications as well as production environments.

Benefits of using OpenStack

OpenStack brings a number of benefits for businesses. And this should be one of the driving forces for companies to adopt it. There are many advantages for using OpenStack, but some of the most cited benefits include:

  • Lower costs.
  • OpenStack allows you to take full advantage of the cloud and help you manage resources in-house.
  • Open source. OpenStack’s source code is open for everyone to see. This means that you can easily customize it to fit your business needs. Plus, you do not have to worry about vendor lock in. You also have a community of enthusiasts who can easily come up with tools that you can use, including from the biggest tech companies such as Oracle.

The fast and constant growth of the OpenStack market

451 Research has tracked the OpenStack business models via Market Monitor, which is a market-sizing & forecasting service providing a bottom-up market size, forecast and share analyses of the ever-evolving OpenStack marketplace. 451 Research trained its focus on 56 vendors that offer direct offerings for OpenStack, including services, products and turnkey packages that help companies deploy and manage OpenStack, as well as different OpenStack distributions. These companies also included those that offered training services and service providers.

The research firm explains that they did not include revenue from the sales of hardware and the revenues from third-party companies that have indirect OpenStack offerings, as such, earnings from software defined networking and storage were not included.

451 Research notes that enterprise adoption of OpenStack is still in its early stages and, as such, revenue generation is expected to increase. 451 Research forecasts that total revenues coming from direct sales of OpenStack software and services will exceed $4 billion in 2019.

Much of these revenues will come from service providers, specifically for those involved with private cloud deployments, and not from public infrastructure as a service providers. However, the research firm believes that revenue will increase across the board, especially those OpenStack distributions and products that are aimed towards enterprises.

That forecast of $4.39 billion is astounding considering that the reported revenue for 2015 was only $1.25 billion. The research firm forecasts $1.77 billion in revenues for 2016 and that will steady increase to $2.48 billion and $3.37 billion in 2017 and 2018, respectively. 451 Research also says that revenues in 2020 are expected to reach $5.38 billion. In short, the expected compound annual growth rate is around 35%.

Service providers

The research firm defines service providers as those companies that host public or private cloud platforms that makes use of the OpenStack technology along with its APIs. According to 451 Research, service providers will bring in the most revenues with estimated earnings of $1.78 billion in 2017, which will increase to $3.2 billion in 2019. And while earnings from public cloud platforms on OpenStack take a bigger share of the revenues, it is seen to change in the coming years. Private cloud service providers will earn more than their public cloud counterparts when 2019 rolls in, an amazing feat considering that public cloud service providers made around 49% of all earnings in 2015.

In 2015, there were five vendors that brought in two-thirds of the total revenues earned by private cloud service providers. These are KIO Networks, Rackspace, OVH, IBM and HPE.

IT services, training and distributions

IT services include companies that install and configure public or private cloud platforms using OpenStack. IT services is seen to contribute $802 million by 2019. This is going to be the fastest growing segment with a projected 51% compounded annual growth rate. Earnings in this segment include the fees that customers pay for formal trainings and certification programs. There are 13 companies that belong to this segment.

The revenue from distributions comes from the cost of licensing and support. While OpenStack is free, businesses usually have to pay for support. The Market Monitor report reveals that the distribution revenue will increase to $375 million in 2019 from only $207 million two years earlier.

The companies that offer an OpenStack distribution together with their own managed services or software or hardware appliance are part of the distributions segment. Red Hat, Canonical, SUSE and Mirantis are the top companies in this segment if you are going to rank companies according to the number of paying customers.

Other vendors that fall in this segment include Oracle, Rackspace, SwiftStack, Cisco, Platform9, HPE, EMC, IBM, ZeroStack, Netpace, Solinea and StackStorm.

Oracle OpenStack for Oracle Linux

Oracle offers the Oracle OpenStack for Oracle Linux that makes the deployment and management of OpenStack easier for their customers. Customers can get a set of fully integrated OpenStack solutions. Linux containers and Docker packages help simplify deployment while Oracle provides full support.

Oracle OpenStack for Oracle Linux simplifies the installation, upgrades and configuration of OpenStack deployments by doing away with the need to install components separately. It is compatible with all Oracle products.

Oracle OpenStack, which is based on OpenStack Kilo, offers all the services that you need to build your cloud infrastructure, including Nova, Glance, Keystone, Cinder, Neutron, Horizon, Swift, Murano, Ceilometer, and Heat.

If you have cloud deployments that you would like to put on OpenStack, then you should simply consider Oracle OpenStack for Oracle Linux. Call Four Cornerstone now at (817) 377-1144 and talk to us to see how we could help.

Photo courtesy of Oracle OpenStack for Oracle Linux.

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