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AWS and Google give no indication that they even believe in private clouds

Open source cloud programs are attractive for the same reasons Linux took hold, low-cost entry point, and application portability. But with competing initiatives from OpenStack, CloudStack, and Eucalyptus, among others, and a bevy of software management tool providers, the question enterprises need to answer as they consider private, public and hybrid cloud options. The stakes are big. Gartner pegs the public cloud market at $131 billion in 2013. The majority of this is social media and marketing services such as Facebook and Google AdSense, respectively, as well as myriad startups that will never build their own infrastructure. And according to a recent IDC forecast, worldwide spending on hosted private cloud will grow to over $24 billion by 2016.

In all likelihood, enterprise workloads are going to move back and forth from behind the firewall to the public cloud. This regardless of whether they have a private cloud or not. In fact, And the way AWS is suffocating the competition with pricing, money that may have once been earmarked for private cloud may be redirected to hybrid cloud providers.

Building a massive public cloud is very complex and expensive. This is especially true for companies (read: branded server makers) that are unwilling to use commodity hardware and software to maximize economies of scale. This is also why developers use Xen and KVM at the hypervisor layer and OpenStack, CloudStack and Eucalyptus at the cloud control layer instead of Microsoft's Windows or VMWare's ESXi. While some people argue that three open source cloud stack options competing for leadership is healthy, it is only so to a degree. Only one will gain widespread adoption in the enterprise. Why? Because that is what enterprises want.

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What they do not want is to reconcile the technical differences in architecture, installation, administration, security and availability between the three stacks. There is nary an enterprise with the budget or talent pool to build their own IaaS by downloading a distribution and standing up a private cloud themselves. As a result, they will contract with a provider in consuming a stack. Any stack.

OpenStack has had the buzz, at least until now. Recent dents have included:

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Consecutive disappointing quarterly results by flag bearer Rackspace, suggesting that it is succumbing to the AWS boa constrictor. Dell's expected announcement to abandon building its own OpenStack-powered public cloud to instead partner with public cloud providers; and IBM's acquisition of CloudStack provider SoftLayer. IBM unifying its CloudStack and OpenStack projects is good for Global Services, but will not challenge AWS, nor Google and Microsoft.
IBM's move cheers Citrix, which released the code from it Cloud acquisition to Apache last year. Citrix originally left OpenStack for CloudStack out of frustration (it lacked a voice in a kitchen with too many chefs), and because CloudStack was gaining commercial viability with over $1 billion in cloud transaction business annually.

Meanwhile, Eucalyptus has evolved into the AWS proxy for shepherding enterprises toward the hybrid cloud option. Its primary selling feature is allowing enterprises that run their private clouds on the Eucalyptus stack to seamlessly burst into aws interview questions as needed. Eucalyptus claims tens of thousands of downloads of its AWS-compatible software owing to API parity with 90% of the most popular services on AWS. Like it or not, this makes it much more readily consumable that OpenStack.

Amazon has succeeded in making its API a de facto standard. As a result, enterprises will find harder to migrate to an open source platform. Eucalyptus only adds justification.

With the ecosystem around OpenStack, it is still the early favorite. There are now dozens of companies, including Canonical, Cloudscaling, IBM, HP, Mirantis, Nimbula, Piston Computing, Red Hat and SUSE that have introduced IaaS products for it.My concern is that such competition increases the risk that strategic features will gradually become proprietary. No one wants to write a cloud application only to discover a lack of portability. This would undermine the premise for an open source stack.

However, this is already happening. OpenStack has already bifurcated from a universal standard into different flavored versions, with each having unique implementation details. Rackspace OpenStack is different from HP OpenStack, which is different from Ubuntu which is different from Red Hat. And so it goes.

The OpenStack Foundation original intended to have one core set of cloud software that would be interoperable to avoid application dependencies. This would be the challenge to AWS dominance. However, OpenStack has so many open-ended options that early implementers have compromised interoperability. In a recent blog post, Rackspace director of cloud compute engineering, Troy Toman wrote, In hustling to release a full suite of open cloud products built on OpenStack, we created some implementation specifics that were out of sync with common practices in other OpenStack implementations.

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