Beginning of the end for OpenStack

I will give you 3 reasons why I think we are witnessing the beginnings of the end for OpenStack. These are strictly my opinions, and if you disagree, feel free to comment/tweet.

Reason 1: Competing in a new evolving market with what may have worked for a different market.

Traditional enterprise software vendors are viewing OpenStack as a way to sell more hardware, software and services. They are thinking of this as a way to lock more enterprises and offer a reason for CIOs to continue renewing their existing contracts with them.  They are failing to recognize the changing market conditions and technology progress that calls for next generation of technology. This is still competing in Market 1, but competing against vendors like VMware. This is often sign of organizations that lacks courage to ask tough questions and reorganize around function needed to succeed.

Reason #2: Competing as if it’s a zero sum game

Each major player in OpenStack ecosystem is competing against each other.  Without naming names, I would ask you to consider the following scenario – perhaps, take the foundation members that each have committed $1B or more to OpenStack.   Let’s call them Player A and Player B. There are finer details, but in my opinion, there are two coarse strategic options for these players.   Player A:

  • Choice1: Compete with all other players
  • Choice2: Collaborate with all other players.

Player B:

  • Choice1: Compete with all other players
  • Choice2: Collaborate with all other players.

There are 4 potential scenarios:

  • Scenario 1: Player A competes, Player B collaborates: A partially wins, B and OpenStack loses
  • Scenario 2: Player A collaborates, Player B collaborates: A, B and OpenStack wins
  • Scenario 3: Player A competes, Player B competes: A, B and OpenStack loses
  • Scenario 4: Player A collaborates, player B competes:  B partially wins, A and OpenStack loses

If only one player wins, the outcome is that OpenStack as an independent Open source project fails and a commercial distribution of it wins. Their dominant strategy is to make sure their version of the product is better suited for enterprise and the common products basically sucks to put other competitors at a disadvantage.

So, in this, the best option is Scenario 2.   Getting all players to Scenario 2 is the responsibility of the foundation. However, you look at what each player is doing and it is clear that they want to win and ensure that others lose. (Just read competitive reactions whenever another $1B investment is announced).

So, it’s my opinion that the options being pursued are 1, 3 and 4. Each of these scenarios, OpenStack loses.   Now, you can expand this to the G8 or the platinum members of the OpenStack foundation and you see similar behavior. Every member thinks that for them to win, rest of the 7 must lose. (Well, maybe not ATT or Nebula, but true for all others).

(ps: I did not think about this one till I saw it in a deck of someone I respect – I initially said its wrong, but the more I thought about it, the more I became convinced that there is a prisoner’s dilemma at work here).

Reason 3: Embracing the cognitive convenience

People say OpenStack is like Linux. This is a lazy comparison IMHO. Different time, different complexity. Operating System is not same as a distributed cloud platform.

By framing the discussion as something we have seen and by taking a lazy answer instead of truthfully asking the question of what would it take for OpenStack to succeed, the main players are fooling themselves, their investors.

System 1 thinking is great, but OpenStack foundation really needs some System 2 thinking (please refer to Daniel Kahneman’s work). That’s all folks.  Have fun at the Summit.

Periodic Rating of Cloud Vendors

Below is a highly subjective, opinionated rating of the Cloud vendors as of end of April.  I will try to do it may be every 3 months or so.

Feel free to disagree/comment/argue why the rating is wrong. Did I miss any other prominent vendors? I did not include PAAS vendors, because I don’t know what it is.

Happy Friday!!

 

Vendor Rating Why?
AWS A- Doing well, but nothing ground breaking or interesting in last few months. May no longer be the darling of the public cloud.
Google A+ Shook up public cloud market with price cuts and innovation.
VMW C- Asleep at the wheels – clinging to past
Verizon B- Can we still hear them?
CenturyLink B+/A- Tier 3 acquisition + price cuts.
RHAT B Much ado about nothing still – seems to be struggling on execution front and trying to fight a losing perception battle. – will revise if InkTank story evolves.
MSFT A For continued momentum – but, it’s time for them to reset the rules of the game.
RAX C- All indications are they are done.