This Day On The Street
Continue to site
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

OpenStack at the Crossroads

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

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

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
Stocks Under $10

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $128.70 0.00%
FB $78.81 0.00%
GOOG $540.78 0.00%
TSLA $230.51 0.00%
YHOO $42.04 0.00%

Markets

DOW 18,070.40 +46.34 0.26%
S&P 500 2,114.49 +6.20 0.29%
NASDAQ 5,016.9290 +11.5380 0.23%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs