Tuesday, November 26, 2013

The oncoming bloodbath for private cloud

Back in 2008, I talked about the development of the "private" cloud market as a transitional phase between the then and a future hybrid market of multiple public providers. Of course, back then I took the view that the hardware vendors in the space would create a price war to force natural fragmentation of the market i.e. commoditisation does not mean centralisation.

Unfortunately, due to the exceptionally poor gameplay of many vendors in this space, then in this instance commoditisation does seem to mean centralisation to Amazon, Google and MSFT.

The key date for me for the decline of the "private" market was 2016. A number of factors from inertia to energy provision to establishing alternative options to cycle time for investment pointed to that time. Given the amount of effort put into OpenStack, the number of vendors involved, the marketing, the investment and the hopes pinned to it ... I tend to now think of 2016 as a bit of a bloodbath for private cloud.

Do I think it will be just those three vendors? Nope. I expect there to be clone environments (e.g. AWS public clones). There's a lot of mileage to be made here and a very specific user need for alternative suppliers which operate in the same way.

Do I think it's all over for private cloud? Nope. I still hold to my view of 2008. Private cloud will head towards niches but admittedly highly profitable niches. The most successful of those niche players will be those that co-opt the public standard i.e. AWS. Hence, I'm quite upbeat about groups such as Eucalyptus, CloudStack and those elements of OpenStack who have a focus on being an AWS clone.

Do I think it's all over for VMware and OpenStack? Pretty much. I take the view that VMware  will experience a slow and painful downward slope and whilst OpenStack will exist after 2016 it won't do so in its current guise. In my opinion, many of the high profile companies involved will be facing a grim future. There will be some high value buy-outs and claims of success but it's all small fry for the future and what should have been for OpenStack.

Do I think it's all over for the idea of an open source reference model for cloud? Nope. I talked about the importance of open source in forming competitive markets at OSCON 2007 and my view remains as is. I view the work of CloudFoundry as developing such a competitive market in the platform space. However, whilst the IaaS industry maybe lost due to sucky gameplay this is but a temporary state. You should never confuse commoditisation with centralisation because the means of production can yoyo between centralised and de-centralised. 

It is perfectly possible that in a decade or so, as the industry becomes more settled and we've come to accept those standards that have been created for us that we will then see a movement towards more decentralised IaaS provision through a competitive market. This is where Apache CloudStack (possibly Eucalyptus) will succeed if momentum can be maintained. It's the usual long slow haul of open source (think 10 -15 years) and one which could have been avoided but in this case wasn't.

So who will succeed? Well, beyond Amazon, Google and MSFT then I see positive futures for AWS clones and for niche market provision of private clouds (especially Eucalyptus, CloudStack and parts of OpenStack). In the longer term, I still favour a competitive market of IaaS providers around an open source reference model but that'll be a good decade or more away.

--- Note, 8th October 2015

Eucalyptus and CloudScaling (focused on being AWS clones) got acquired. We've still to see any large scale public AWS clone launch (it's become way too late now to mount any serious effort). I'm disappointed here as I was expecting at least sometime to try this obvious game.  There's some niches for OpenStack in the network equipment vendor space (due to NFV). CloudFoundry continues to develop well but the past giants are still being half hearted about this. People keep on telling me that the future for private cloud is bright ... I don't think so, I think some are living in la la land.
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