Every week the Opus team picks a news story or topic or idea that is relevant to the entrepreneurs and businesses we partner with.

RSS Feed

Archives

IBM all in with OpenStack

Ajit Deshpande - - 0 Comments

We discussed back in January about Open Compute, the Rackspace and Facebook driven open-source server initiative, and about how there was growing momentum for commoditization in hardware for the cloud. Well, last week brought news that signaled similar momentum for the OpenStack project, an open and scalable operating system for building private and public clouds, with IBM announcing that all of its cloud services and software will be based on the OpenStack architecture. Since joining the OpenStack Foundation in April’12, IBM apparently has been the number 3 code contributor to OpenStack, so last week’s announcement wasn’t completely earth-shattering, but even so, getting a services giant of IBM’s caliber gives OpenStack a huge fillip.

OpenStack as a cloud platform is part of a still-evolving competitive space. For private clouds, there are multiple players inclusive of OpenStack, with a variety of pricing models, features and interoperability constraints. Amongst these, OpenStack is differentiated in that it is the only one operated by a Foundation as opposed to a corporate entity. In the public cloud, AWS clearly leads the way, with OpenStack (pushed by Rackspace) and Google Compute Engine being the other key players. In this context, the IBM backing helps OpenStack significantly with customer outreach as well as with peer pressure on other IT services firms, both of which will spur distribution (in a way reminiscent of IBM’s backing of Linux in 1999). As mentioned in the public domain, OpenStack now becomes a legitimate challenger to AWS (especially for interoperability and for ease of instantiation) and could dent VMware’s dominance in server virtualization.

So what does this mean for entrepreneurs? Does a services giant like IBM entering this business mean that the potential for building standalone, highly successful startups in this domain has decreased? Probably so – wider adoption should reduce valuations and exit multiples, and so we should soon expect consolidation in this space. Mainstream cloud adoption has gotten a tailwind, but for innovators, the cloud might finally be nearing maturation!

« Back to Blog
Also on the Opus Blog

Pivotal and the Industrial Internet

April 30, 2013
Ajit Deshpande - First came SaaS, enabling application delivery through the cloud. Then came IaaS, providing the elastic infrastructure for enterprises to host their data and applications in the...

Consolidation at Point-of-Sale

December 4, 2012
Ajit Deshpande - Last week brought news of consolidation in the POS system segment – National Cash Register (NCR) Corporation announced its $650M acquisition of Retalix, a developer of software...

Look beyond “base-level” security to build a valuable container security company

March 3, 2016
Preeti Rathi - Much has been written about how containers are porous - that they are not as secure as virtual machines. Infact, a while ago, I penned a blog about how security is the weakest area...

VMware / Nicira and the Software Defined Data Center

July 29, 2012
Ajit Deshpande - Last week, VMware announced that it was acquiring early Software Defined Networking leader Nicira for a deal worth ~$1.26 billion. Nicira is a trend-setter in Sotware Defined...