More #FakeNews: The Death of OpenStack

OpenStack deployments are growing among companies of all sizes, especially as a managed service.

Over the last two years, there have been articles in the press suggesting OpenStack is in trouble.

These reports typically cite vendors who are exiting the market or laying off OpenStack employees. Let’s get real here: HPE’s divestiture of Helion is no more a harbinger of OpenStack’s demise than its divestiture of Vertica foreshadows the end of the Big Data market. Similarly, Mirantis’ widely publicized layoffs don’t indicate a decline in OpenStack demand; instead, its newfound focus on managed services shows a shift in that demand.

Clickbait headlines aside, the facts are clear: OpenStack deployments are growing. It is becoming a standard cloud platform for corporations of all sizes, which are consistently growing their usage of OpenStack. That trend is born out at Rackspace, where we’re seeing dramatic growth in our customers’ usage of OpenStack.

So why the confusion? What’s really happening in the market?

OpenStack is winning the private cloud market. As Forrester Research concluded, “OpenStack has grown into a de facto standard platform for the private cloud market.” The reasons are simple, but compelling:


  • OpenStack has rich enterprise cloud features.
  • OpenStack works at cloud scale, with real cloud use cases (as opposed to many pseudo-clouds, which are really just using virtualization at scale).
  • It is an open platform, giving customers access to better innovation and economics than proprietary software controlled by one vendor.
  • OpenStack has economic advantages over competitors.

OpenStack did have two false starts, which colored opinion. In the early days, OpenStack’s success was gauged by its position in the public cloud market. But the advantages of OpenStack weren’t compelling for that market; after all, public clouds by their nature are proprietary platforms, and the economic leadership goes to the vendors with the greatest scale.

The second false start was when OpenStack vendors tried to package, sell and support OpenStack in a manner similar to Linux. OpenStack isn’t Linux. It is cloud software. And cloud software is a lot more complicated than an operating system. Linux had a ready market of people who knew how to manage and operate Unix. In the case of OpenStack (or any other real private cloud), there are only a handful of companies with experience operating cloud infrastructure at cloud scale.

Most vendors didn’t realize this, and they tried to fit OpenStack into their decades-old packaging and distribution model. Not surprisingly, their customers struggled to make their clouds successful.

Rackspace chose another route. As the creator of what became the industry’s fourth-largest public cloud, we knew firsthand the complexity of operating at cloud scale. So instead of selling OpenStack as packaged software to private cloud users, we delivered it as a cloud service, where all the complexity is managed by the vendor, and the customer simply consumes private cloud services. The result was successful customers and strong growth of our OpenStack business.

This is driving a fundamental change in the way open source infrastructure is consumed. OpenStack marks the point where open source infrastructure software became too complex to be delivered as a traditional software distribution. To successfully harness the power of open source innovation, the vast majority of users will consume open source infrastructure as a service, which is, after all, the way cloud was meant to be used.

Some of the vendors who haven’t crossed this chasm are indeed exiting the OpenStack business. Others are trying to develop the operational experience necessary to deliver private clouds as a service. Rackspace’s billion server hours of OpenStack operational experience is probably an insurmountable lead. That’s why other vendors such as Red Hat have created partnerships, blending their innovation with our operations capabilities.

1 billion server hours

Far from being in danger of demise, OpenStack has become the catalyst for a rich and vital transformation in the way the world consumes open source infrastructure. We at Rackspace are proud to have led that change, just as we led the creation of OpenStack.

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As Executive Vice President, Private Clouds at Rackspace, Scott Crenshaw oversees the company’s global business unit focused on providing managed services for leading private clouds such as OpenStack and Microsoft. Prior to joining Rackspace, Scott was Senior Vice President, Products, at VeriSign, Inc., where he led the development of the company’s new products and services. Before Verisign, Scott served in executive positions at such companies as Red Hat, Inc., NTRU Cryptosystems, Inc., and Datawatch Corporation. At Red Hat, he was Vice President and General Manager of their Linux business unit, and Vice President and General Manger of their virtualization and cloud business unit. He was on the founding team of two startups. Scott holds a bachelor’s degree in computer science from North Carolina State University and an MBA from the Massachusetts Institute of Technology, where he was a Sloan Fellow.



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