OpenStack-Related Revenues Set To Rise By A Third Thanks To Private Cloud Growth

Revenues from OpenStack-based businesses are set to grow by 35 percent a year to more than $5 billion (£4bn) by 2020, according to new research.

OpenStack, an open-source platform for cloud computing, has to date been deployed mainly by providers offering multi-tenant cloud infrastructure services, but that is set to change, with most OpenStack revenues to come from private cloud deployments by 2019, according to a study from 451 Research.

Shift to private cloud

Private cloud deployments include those operated by a single organisation, either on-premises by an organisation for its own purposes or at a remote location and managed by a third party.

While OpenStack’s revenue growth is high, overall income from providers using the platform is still relatively small compared with big-name services such as VMware and Amazon Web Services, 451 noted.

“451 Research believes OpenStack’s success going forward will be in the private cloud space and in providing the orchestration for public cloud integration with on-premises and hosted OpenStack environments,” the group stated.

To date the platform is still mainly used for test and development, web hosting and pilot projects, although a few organisations use it for mission-critical workloads, the study found.

Software-defined networks

In addition to existing big data, development, platform-as-a-service deployment types the study predicted OpenStack would be increasingly used for software-defined networking, network function virtualisation, mobile and and connected devices by both service providers and enterprises.

The company noted that the attention increasingly paid to software such as Docker, which automates the deployment of Linux applications inside software containers, threatens to eclipse OpenStack and could eventually overtake it.

But for the time being container software remains “mostly beneficial and complementary” to the cloud platform, 451 said.

451 Research vice president Al Sadowski said OpenStack has become a “credible cloud option” this year.

“We expect an uptick in revenues from all sectors and geographic regions, especially from those companies in the OpenStack Products and Distributions category that are targeting enterprises,” he stated.

New deployments

Organisations are increasingly considering it for cloud-native application deployment in new private clouds and for reducing their dependency on proprietary offerings.

But companies looking to support legacy software, and those already relying on large-scale providers such as Amazon and Microsoft, OpenStack’s appeal is “limited”, the research found.

“Many enterprises are still leery of the perceived complexity associated with configuring, deploying and maintaining OpenStack-based architectures,” 451 stated.

The research arrives ahead of OpenStack Summit 2016 this week in Barcelona, where Red Hat separately made several announcements, including Red Hat OpenStack technology partnerships with UKCloud, the leading public cloud provider for the British government, and telecommunications company Swisscom.

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