2014's slate of cloud deals reflect a few important trends in the market for the open source cloud software. One is that traditional enterprise vendors continue to see potential in OpenStack and they're willing to shell out the cash to buy the expertise and technology they need to pursue the market.
The second is that despite interest from those big vendors, actual adoption of OpenStack hasn't happened as quickly as some people might have hoped. The result is that some of the startups, even trendsetters like Cloudscaling, are open to acquisition as they realize they may not be able to make it on their own.
The impact of these deals is still unknown. On the downside, the acquiring vendors all have other flagship businesses they need to protect. In many cases, that means they'll limit customers of their new OpenStack products and services to using their legacy products. The result is users won't have as much choice as they might like.
The upside, however, is that the traditional vendors know how to ship stable, well-supported products. That's a plus for any business that's been reluctant to go with an OpenStack startup.
Here are the top five cloud deals of the year, so far:
EMC buys Cloudscaling for an unconfirmed $50 million
The rationale: With more workloads moving to the cloud, EMC knows its storage products have to be in the running for businesses building cloud operations. While EMC is an obvious option for VMware shops given that it owns VMware, it's not always top of mind in the open source world. With its platform for building private OpenStack clouds, Cloudscaling gives EMC a foot in the door in the OpenStack community.
It remains to be seen if a culture clash will lead to hiccups, however. Cloudscaling, with its outspoken founder Randy Bias, has a reputation as a scrappy upstart. EMC, on the other hand, is more of a staid, traditional vendor.
Who cares? It's possible that Cloudscaling won't be quite so open once it gets absorbed by EMC.Cloudscaling currently names EMC competitors including Dell, HP and Supermicro as partners on its web site, and Nexenta's CEO is on Cloudscaling's board. Also, Cloudscaling's platform allows users to build hybrid clouds with Amazon Web Services and Google Cloud Platform. Given that those businesses compete with EMC or VMware in some way, it wouldn't be a surprise if EMC restricts Cloudscaling's openness in the future. That could be a disappointment for potential Cloudscaling users.
Impact: With the backing of a giant like EMC, Cloudscaling is likely to stabilize and become more attractive to enterprises. But being backed by a giant often means slower innovation. Combined with the potential for less choice for users, this deal slightly tips negative in terms of potential benefit to users.
HP buys Eucalytpus for an unconfirmed $100 million
The rationale: HP's press release about the deal focused heavily on the fact that Marten Mickos, Eucalyptus's CEO, will run HP's cloud business. There was essentially no mention of Eucalyptus's technology – a private cloud platform that's compatible with AWS. It's hard not to think that HP bought Eucalyptus primarily to get Mickos, who was also previously CEO of MySQL.
Who cares? If Mickos gets his way, users might get a unique and valuable capability. In an interview on the day the acquisition was announced, Mickos said his hope was to use Eucalyptus technology to bring AWS compatibility to HP's OpenStack cloud products. That could be attractive for businesses that want to build private OpenStack clouds that burst to AWS when additional resources are needed.
Impact: The fact that Eucalyptus couldn't go it alone seems to prove that a community-based open source project like OpenStack has a better chance of success than an open source platform driven by one company, like Eucalyptus. Chalk this up as a win for the OpenStack community.
Cisco bought Metacloud for an undisclosed sum
The rationale: With Metacloud, Cisco gets a unique technology that delivers an OpenStack private cloud as a service, remotely managing the cloud for customers. Cisco has actually had its own OpenStack distribution for years, but you'd be forgiven for not knowing it existed. The Metacloud deal lets Cisco sell customers server hardware combined with a well-known platform for running a cloud.
Who cares? VMware might. Cisco and VMware have had a curious relationship over the past few years, at one moment, partners, and the next, competitors.
For instance, Cisco, EMC and VMware started VCE, which offers packaged compute, storage and networking from those three companies. (Just this week Cisco reduced its stake in VCE to 10%.) Cisco also makes it easy for users of its server hardware to run VMware's cloud products. With Metacloud, however, Cisco now opens the door for customers to go OpenStack instead of VMware.
Impact: Customers and potential customers lose another independent service provider, which offered users lots of choice, but gains a backer determined to be successful in OpenStack. This one is a wash.
Red Hat buys eNovance for $95 million
The rationale: Red Hat wants to dominate OpenStack and with eNovance it gains deployment expertise, since eNovance is in the business of helping customers build OpenStack clouds.
Who cares? While eNovance was open to using the best technology to meet a customer's needs, including sometimes recommending AWS instead of an OpenStack cloud, that's likely to change under Red Hat. For instance, eNovance will surely steer customers to Red Hat's OpenStack distribution rather than any available from competitors.
Impact: The presumed loss of choice for eNovance customers pushes this deal into the negative column for customers.
Red Hat buys Inktank for $175 million
The rationale: Adding Inktank's Ceph object and block storage software to its existing Gluster file system storage gives Red Hat a more complete portfolio of storage offerings. Also, as Ceph is popular among OpenStack users, the deal makes sense as part of Red Hat's enthusiastic support of OpenStack.
Who cares? Red Hat tends to do its best to herd customers exclusively toward its own products, but it has pledged to keep Ceph open. For instance, Red Hat has said that Ceph will continue to run on non-Red Hat operating systems.
Impact: If Red Hat does indeedallow Ceph to continue to support non-Red Hat products, this deal should be a solid win for OpenStack users. Ceph has proved valuable to the OpenStack community and can benefit from Red Hat's experience running open source projects and delivering open source products.