Combine the supercharged Cloud Computing marketplace with the ubergeek cred of the open source movement, and you’re bound to have some Mentos-in-Diet-Coke moments. Such is the case with today’s Cloud Service Orchestration (CSO) platforms. At this moment in time, the leading CSO platform is OpenStack. Dozens of vendors and Cloud Service Providers (CSPs) have piled on this effort, from Rackspace to HP to Dell, and most recently, IBM has announced that they’re going all in as well. Fizzy to be sure, but all Coke, no Mentos.

Then there are CloudStack, Eucalyptus, and a few other OpenStack competitors. With all the momentum of OpenStack, it might seem that these open source alternatives are little more than also-rans, doomed to drop further and further behind the burgeoning leader. But there’s more to this story. This is no techie my-open-source-is-better-than-your-open-source battle of principle, of interest only to the cognoscenti. On the contrary: big players are now involved, and they’re placing increasingly large bets. Add a good healthy dose of Mentos – only this time, the Mentos are money.

Understanding the CSO Marketplace
Look around the Infrastructure-as-a-Service (IaaS) market. Notice that elephant in the corner? That’s Amazon Web Services (AWS). The IaaS market simply doesn’t make sense unless you realize that AWS essentially invented IaaS. And by invented, we mean actually got it to work. Which if you think about it, is rather atypical for most technology vendors. Your average software vendor will identify a new market opportunity, take some old stuff they’ve been struggling to sell, give it a nice new coat of PowerPoint, and shoehorn it into the new market. If customers bite, then the vendor will devote resources into making the product actually do what it’s supposed to do. Eventually. We hope.

But AWS is different. Amazon.com is an online reseller, not a software vendor. They think more like Wal-Mart than IBM. They figured out elasticity at scale, added customer self-service, and christened it IaaS. Then they grew it exponentially, defining what Cloud Computing really means. Today, they leverage their market dominance and economies of scale to continually lower prices, squeezing their competitors’ margins to nothing. It worked for Rockefeller’s Standard Oil, and it works for Wal-Mart. Now it’s working for Amazon.

But as with any market, there are always competitors looking to carve off a bit of opportunity for themselves. Given AWS’s dominance, however, there are two basic approaches to competing with Amazon: do what AWS is doing but try to do it a bit better (say, with Rackspace’s promise of better customer service), or do something similar to AWS but different enough to interest some segment of the market (leading in particular to the Enterprise Public Cloud space populated by the likes of Verizon Terremark and Savvis, to name a few).

And then there are the big vendors like HP and IBM, who not only offer a range of enterprise software products, but who also offer enterprise data center managed services and associated consulting. Such vendors want to play two sides of this market: they want to be Public Cloud providers in their own right, and also offer “turnkey” Cloud gear to customers who want to build their own Private Clouds. Enter OpenStack. Both of the aforementioned vendors as well as the smaller players realize that piecing together their own Cloud offerings will never enable them to catch up to AWS. Instead, they’re joining forces to build out a common Cloud infrastructure platform that supports the primary capabilities of IaaS (compute, storage, database, and network), as well as providing the infrastructure platform for Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS) capabilities down the road. The open source model is perfect for such collaboration, as the Apache license allows contributors to take the shared codebase and build out whatever proprietary add-ons they like.

Perhaps the most touted, and yet most challenging benefits of the promised all-OpenStack world is the holy grail of workload portability. In theory, if you’re running your workloads on one OpenStack-based Cloud, you should be able to move them lock stock and barrel to any other OpenStack-based Cloud, even if it belongs to a different CSP. Workload portability is the key to Cloud-based failover and disaster recovery, Cloud bursting, and multi-Cloud deployments. Today, workload portability requires a single proprietary platform, and only VMware offers such portability. AWS offers a measure of portability within its Cloud, but will face challenges supporting portability between itself and other providers. As a result, if OpenStack can get portability to work properly, participating CSPs will have a competitive lever against Amazon.

Achieving a strong competitive position against AWS with OpenStack is easier said than done, however. OpenStack is a work in progress, and many bits and pieces are still missing. Open source efforts take time to mature, and meanwhile, AWS keeps growing. In response, the players in this space are taking different tacks to build mature offerings that have a hope of carving off a viable chunk of the IaaS marketplace:

• Rackspace is trying to capitalize on its OpenStack leadership position and the aforementioned customer service to provide a viable alternative to AWS. They are also touting the workload portability benefits of OpenStack. But downward pricing pressure combined with the holes in OpenStack capabilities are pounding on Rackspace’s stock price.
• Faced with the demise of its traditional PC business, Dell is focusing on its Boomi B2B integration product, recently rechristened as Cloud integration. Cloud integration is a critical enabler of Hybrid Clouds, but doesn’t address the workload portability challenge. As a result, Dell’s Cloud marketing efforts are focused on the benefits of integration over portability. Dell’s recent acquisition of Quest Software also hints at a Microsoft application migration strategy for Dell Cloud.
• HP wants to rush its Enterprise Public Cloud offering to market, and it doesn’t want to wait for OpenStack to mature. Instead, it’s hammering out its own version of OpenStack, essentially forking the OpenStack codebase to its own ends, according to Nnamdi Orakwue, vice president for Dell Cloud. Such a move may pay off for HP, but increases the risk that the HP add-ons to OpenStack will have quality issues.
• IBM recently announced that they are “all in” with OpenStack with the rollout of IBM SmartCloud Orchestrator built on the platform. But IBM has a problem: the rest of their SmartCloud suite isn’t built on OpenStack, leaving them to scramble to rewrite a number of existing products leveraging OpenStack’s incomplete codebase, while in the meantime, integrating the mishmash of SmartCloud components at the PowerPoint layer.
• Red Hat is making good progress hammering out what they consider an “enterprise” deployment of OpenStack. As perhaps the leading enterprise open source vendor, they are well-positioned to lead this segment of the market, but it still remains to be seen whether enterprise customers will want to build all open source Private Clouds in the near term, as the products gradually mature. On the other hand, IBM has a history of leveraging Red Hat’s open source products, so an IBM/Red Hat partnership may move SmartCloud forward more quickly than IBM might be able to accomplish on its own.

CSO Wild Card: CloudStack
There are several more players in this story, but one more warrants a discussion: Citrix. The desktop virtualization leader had been one face in the OpenStack crowd, but they suddenly decided to switch horses and take a contrarian strategy. They ditched OpenStack, took their 2011 Cloud.com acquisition and donated the code to CloudStack. Then they switched CloudStack’s licensing model from GNU (derivative products must be licensed under GNU) to Apache (OK to build proprietary offerings on top of the open source codebase), and subsequently passed the entire CloudStack effort along to the Apache Foundation, where it’s now in incubation.

There are far fewer players on the CloudStack team than OpenStack’s, and its core value proposition is quite similar to OpenStack, so on first glance, Citrix’s move raises eyebrows. After all, why bail on the market leader to join the underdog? But look more closely, and it seems that Citrix may be onto something.

First, Citrix’s open source Cloud strategy is not all about CloudStack. They’re also heavily invested in Xen. Xen is one of the two leading open source virtualization platforms, and provides the underpinnings to many commercial virtualization products on the market today. Citrix’s 2007 acquisition of XenSource positioned them as a Xen leader, and they’ve been driving development of the Xen codebase ever since.

Citrix’s heavy investment in Xen bucks the conventional virtualization wisdom: since Xen’s primary competitor, KVM (Kernel-based Virtual Machine) is distributed as part of standard Linux distros, KVM is the no-brainer choice for the virtualization component of open source CSOs. After all, it’s essentially part of Linux, so any CSP (save those focusing on Windows-centric IaaS) don’t have to lift a finger to build their offerings on KVM. Citrix, however, picked up on a critical fact: KVM is simply not as good as Xen. And now that Citrix has been pushing Xen to mature for half a dozen years, Xen is a far better choice for building turnkey Cloud solutions than KVM. So they Citrix combined Xen and CloudStack into a single Cloud architecture they dubbed Windsor, which forms the basis of their CloudPlatform offering.

And therein lies the key to Citrix’s contrarian strategy: CloudPlatform is a turnkey Cloud solution for customers who want to deploy Private Clouds – or as close to turnkey as today’s still nascent Cloud market can offer. Citrix is passing on the opportunity to be their own CSP (at least for now), instead focusing on driving CloudStack and Xen maturity to the point that they can put together a complete Cloud infrastructure software offering. In other words, they are focusing on a niche and giving it all they got.

The ZapThink Take
If this ZapFlash makes comprehending the IaaS marketplace look like herding cats, you’re right. AWS has gotten so big, so fast, and their products are so good, that everyone else is scrambling to put something together that will carve off a piece of what promises to be an immense market. But customers are holding the cards, because everyone knows how AWS works, which means that everyone knows how IaaS is supposed to work. If a vendor or CSP brings an offering to market that doesn’t compare with AWS on quality, functionality, or cost, then customers will steer clear, no matter how good the contenders’ PowerPoints are.

But as with feline wrangling, it’s anybody’s guess where this tabby or that calico is heading next. If anyone truly challenges Amazon’s dominance, who will it be? Rackspace? IBM? Dell? Or any of the dozens of other four-legged critters just looking for a warm spot in the sun? And then there’s the turnkey Cloud solution angle. Today, building out your own Private Cloud is difficult, expensive, and fraught with peril. But if tomorrow brings simple, low cost, low risk Private Clouds to the enterprise, how will that impact the Public CSP marketplace? You pays your money, you takes your chances. But today, the safe IaaS choice is AWS, unless you have a really good reason for selecting an alternative.

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