OpenStack Concerns for the Cloud Service Provider

On Saturday, Simon Wardley criticized OpenStack in a blog post “The Last Twelve Months” where he reflected on the fact that concerns he raised about OpenStack 12 months earlier have not yet been addressed.

Simon is interested and supportive of the merits of seeing OpenStack succeed but he, like others, recognize that OpenStack is not yet the whole product solution needed by the market. Similar to Simon, other analysts, industry commentators and OpenStack practitioners recognize the limitations of any OpenStack project and the risks and costs associated with DIY and consultancy led projects around OpenStack.

Simon Twitter Conversation

From Flexiant’s point of view, we always assess cloud technology, including OpenStack, in terms of its ability to provide a service provider ready solution for anyone who wants to launch differentiated commercial cloud services, quickly and at scale. While OpenStack has capability, it is clearly far from ready to take on the ‘service provider ready’ role.

We absolutely agree with the view of Simon that statements from companies such as Mirantis, that OpenStack will dominate everything, are far from reality. As Simon says the grand idea is a long way from being delivered (even if there is some forward progress).

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Self Service Provisioning Important Now, Granular Metering & Billing Important in Future

Initial results from our survey on the cloud service market show that of the respondents, self-service provisioning is an important capability many are offering their customers now (70%).  However, in future, a high percentage of respondents (63%) say that granular metering and granular billing will be an important capability to offer customers.

Do you agree or disagree? Take the survey below or click here to open in a new window to share your opinion. The quick nine question survey seeks to evaluate the cloud service market from the providers point of view so you can better understand where you might see your competition now and in the future. The results promise to reveal what cloud services are currently offered and will be in the future, where international expansion is expected and what capabilities, you the service provider, require in your quest to capture the significant market opportunity.

The survey will only take a few minutes of your time. Upon completion you will be asked for your email address. If you would like to see the results once analyzed, please complete.

  

Cloud Service Provider Billing Models Explained

I read an article recently on Deconstructing your AWS cloud bill and how it is so complicated because billing is broken down by five major service types, which are compute and networking, storage and content delivery, databases, deployment and management, and application services as well as options and features. If you then consider that these can be consumed per hour, on a discounted rate based on upfront commitment, or even spot priced basis, you can see why cloud billing can get complicated and AWS is not alone.

Cloud Billing

Some companies are solving these challenges such as NewVem, which helps to better optimize AWS and realize time and cost savings; Cloudability, which offers cloud cost management tools; and PlanForCloud, which enables sophisticated modeling of the components of cloud deployments.

Today though I want to offer a detailed explanation of the different billing models we are seeing in the market. As service providers move to provide cloud services, all billing models have different pros and cons depending on each customer, its usage model and internal budgeting requirements.  The key though is for service providers to realize that a number of different models do exist and to understand the benefits and revenue growth that the different models can provide.

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The Cost of Cloud

Yesterday I read an article on Forbes, ‘Do You Replace Your Server Or Go To The Cloud? The Answer May Surprise You’ which debated whether small businesses are, or should be moving to the cloud. That’s a debate that spurs a lot of back and forth that I think will continue. Regardless, the point I found extremely interesting was about the cost of cloud.

Jim Legans Cost of Cloud

Contributor, Gene Marks, said:

Things were getting to a breaking point, and all six of my clients decided it was time for a change. So they all moved to cloud, right?

Nope.  None of them did. None of them chose the cloud. Why? Because all six of these small business owners and managers came to the same conclusion: it was just too expensive. Sorry media.  Sorry tech world. But this is the truth. This is what’s happening in the world of established companies.

He then went on to do the math after evaluating cloud based hosting services from Amazon, Microsoft and Rackspace and found that the services would be about $100 per month per user.  With 20 users, that is $2,000 per month, $24,000 per year. The article went on to show that the cost of buying a server and hiring an IT person was still cheaper.

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2013 Predictions: Cloud Service Provider Roundup

It is that time of year when companies, analysts and industry influencers are making predictions on what will occur in the industry over the next year. We’ve been monitoring these predications. Some we agree with, others not so much. Below you’ll find a roundup of predications we believe are relevant to the cloud service provider. We’ve include some Flexiant comments on these as well.

Flexiant 2013

Cloud Computing as a Service

Coke and other ‘colas’

Prior to 2012, the cloud-computing market could be described as ‘Coke’ without any ‘Pepsi,’ such was Amazon’s dominance. Even if, conservatively, Amazon is more than $50m annual revenue in cloud. Credible other ‘colas’ are now coming on stream.

With Microsoft and Google extending into IaaS from PaaS, and HP and Dell entering the market, it’s clear that the addition of these mega-clouds will mean that it is not an Amazon-only world. Clearly, it’s Amazon’s market to lose, but with >50% of the IaaS market, it’s unlikely to be caught any time soon. It remains a rising tide that is floating all boats in this market.
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