This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

OpenStack at the Crossroads

Stocks in this article: IBM HPQ DELL VMW MSFT AAPL AMZN GOOG CTXS RAX RHT BBY

NEW YORK ( TheStreet) -- OpenStack, the open source cloud infrastructure foundation, began its annual summit Tuesday in Portland, with the cloud at a critical juncture.

These should be the best of times for OpenStack.

Launched in 2010, it has won endorsements from IBM (IBM), Hewlett-Packard (HPQ), Dell (DELL) and most major phone companies, which want to build public clouds compatible with it. A new version dubbed Grizzly adds support for VMware (VMW) and Microsoft (MSFT) hypervisors, the software that creates virtual machines.

Derrick Harris of GigaOm recently went back to 16 cloud companies he'd reported on in June 2010 and found most had closed, changed strategies or gone silent in the face of OpenStack's big corporate endorsements.


But these are also very dangerous times for OpenStack.

The hype cycle has peaked. Amazon.com (AMZN) dominates the public cloud with its proprietary Amazon Web Services, or AWS. Microsoft still has substantial market share for its Azure cloud platform. When it comes to media storage, so does Apple's (AAPL) iCloud. And the Google (GOOG) Compute Engine remains in the league.

Amazon's regular price cuts have made it a de facto standard, a billion-dollar business that could be a $20 billion business by 2020. Companies can create an AWS-compatible private cloud with Eucalyptus, whose CEO, Marten Mickos, yesterday hyped a R.W. Baird study that for every dollar spent on cloud services, $3 to $4 is lost to traditional IT.

Amazon's aggressiveness is leading to rapid consolidation in the cloud space, although Microsoft has promised to meet it, price cut for price cut, writes GigaOm.

The rest of the industry -- the people looking to build their own private clouds or create public clouds compatible with them, so-called "hybrid" clouds -- find themselves choosing among OpenStack, VMware's vCloud and Citrix' (CTXS) Apache CloudStack for their infrastructure.

They can't all win.

Thus, the Portland meeting. Portland has become a de facto home office for open source. The Linux Foundation is based there. Linus Torvalds lives there. This week the Linux Foundation announced it is making Xen, the hypervisor powering Citrix, a Linux Foundation Collaborative Project.

The OpenStack Summit schedule is filled with glowing testimonials from big companies. Rackspace (RAX), the original corporate sponsor, opened the show, followed by Red Hat (RHT), now the second-largest company committed to the project.

There were case studies from Samsung and Best Buy (BBY). HP threw a party. Dell, Red Hat and Rackspace are also throwing parties. Much beer will be consumed, and many business cards exchanged.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs