Making money on OpenStack

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Startups and enterprises alike have placed their strategic bets to monetize the OpenStack wave in various ways. As an ecosystem insider and board memeber of the OpenStack Foundation, in his talk, Boris Renski will offer his views on how various organizations in the OpenStack ecosystem are trying to monetize it today. He will also share his perspective on what works and what doesn’t, based on his experience helping grow Mirantis’ OpenStack business to 100+ people in just under 18 months.

Making money on OpenStack

  1. 1. MAKING MONEYON OPENSTACK Boris Renski b@renski.com @zer0tweets
  2. 2. In Soviet Russia people drove cars like this! 2
  3. 3. In modern Russia, people drive cars like this! 3
  4. 4. When most people think of OpenStack, they imagine this… 4
  5. 5. When I think of OpenStack, I imagine this… 5
  6. 6. The four questions:1. Is there money in OpenStack?2. How much money is there?3. Why OpenStack vs. “other stacks?”4. How do you make that money? 6
  7. 7. Is there $$$ in OpenStack? 7
  8. 8. CLOUD IS BIG + CLOUD IS OPEN + OPENSTACK IS THE KING OF OPEN CLOUD =…THERE MUST BE GREAT OPPORTUNITY HERE… 8
  9. 9. cloud is BIG 9
  10. 10. cloud is open …why…? …because cloud pioneers show thatopen is the way! Enterprises will follow in time. 10
  11. 11. OpenStack won open cloud warsAverage # of developers in an IRC channel as of 6/18 11
  12. 12. OpenStack is the king of open cloudOpenStack is the #2 FOSS foundation 1 The Linux Foundation = $9.6M 2 Openstack = $6M 3 Mozilla Foundation = $1.9M 4 The Apache Foundation - $0.53M 12
  13. 13. How much $$$ is there? 13
  14. 14. How big is OpenStack market?Market: Total amount of IT spending influenced by OpenStack.Revenue Streams: Hardware, Software, Services Hardware Services Software 14
  15. 15. Top down way to analyze• VMware owns 59% of the market• VMware license revenue for cloud infrastructure is 1.6B in 2011• Total market for cloud infrastructure software is 2.7B• Including hardware and services $15B 15
  16. 16. OpenStack is disrupting a $15B market.Nobody knows the exact market size, but everybody knows that the market is… Very Nice! 16
  17. 17. Why is it a better investment then “other stacks?” 17
  18. 18. OpenStack was built for the communityOpenStack is the enabler for communityinnovation….• Started by a community• Developed by a community• Marketed by a community• With the goal of enabling participants to add value and make money 18
  19. 19. Alternatives are for the founding vendorAlternatives, are vendor driven projects:• Started by a single vendor• Developed by a single vendor• Marketed by a single vendor• With the goal to create a veil of “no vendor lock-in” 19
  20. 20. How do you get the $$$? 20
  21. 21. Who do you sell to? 21
  22. 22. Who do you sell to? 22
  23. 23. Who do you sell to? 23
  24. 24. Who do you sell to? 24
  25. 25. Who do you sell to? 25
  26. 26. Who do you sell to? 26
  27. 27. Who do you sell to? 27
  28. 28. Who do you sell to? 28
  29. 29. What can you sell? Infrastructure VendorsUse Case • Ride the Hype • Differentiate with “cloud.” • Integrate with OpenStack to leverage market pull.What can you sell? • Engineering services and expertise around OpenStack. 29
  30. 30. What can you sell? Service Providers & Internet Application VendorsService Provider Use Case • Compete with AmazonInternet Application Vendor Use Case • Dev/Test • Standardize on infrastructureWhat can you sell? • Mostly expertise and services • Some support • Some tooling 30
  31. 31. What can you sell? EnterpriseUse Case • Alternative to VMwareWhat can you sell? • Engineering services • Managed services • Support subscription • Tools • VBlock-like OpenStack bundles 31
  32. 32. What can you sell? Is this true for OpenStack?On-premise enterprise software is dead (roughly 50% infra spending) • On-premise enterprise software growth at 2% • SaaS software growth expected at 50%+ IDCIaaS is growing at 100%/year with healthy enterprise adoption 32
  33. 33. The Ecosystem OPENSTACK CAMPSSystem Integration Support Software Hardware OPEN BUT HARD: PROPRIETARY BUT EASY: • Harder to deploy/adopt • Easy to adopt • Easier to sell • Harder to sell • Low risk – Low reward • High risk – High reward 33
  34. 34. Hardware CampPROS CONS• Aligned with enterprise • Hard to penetrate the buying patterns market• Can sell through channel • Significant upfront R&D• Leveraged business model investment KEY PLAYERS iPhone of OpenStack Best price-performance with The Incumbents commodity components 34
  35. 35. Software CampPROS CONS• Can be less R&D then • Enterprises are used buying appliance VMWare, not cloud• Hardware vendors can be a • Still need to invest in brand; channel VARs don’t create demand• Leveraged business model • OpenStack is free, no? KEY PLAYERS OpenStack for OpenStack for the Swift for SaaS Easy to install OpenStack massive scale / enterprise; Vendors for everyone webscale VMWare killer 35
  36. 36. Support CampPROS CONS• Leveraged business model • Battle against incumbents• Full use of OpenStack • Must have a brand momentum • Isn’t trivial to just sell• Aligned with how enterprises support buy open source KEY PLAYERS Support is what we do We own the cloud We own the We own mission enterprise critical apps 36
  37. 37. SI CampPROS CONS• Start monetizing with minimal • Business scales linearly investment • Will commoditize long term• Learn while making money• Full use of OpenStack momentum KEY PLAYERS #1 SI in the OpenStack Small but smart; The Incumbents Ecosystem we know HA 37
  38. 38. The Mirantis Story 38
  39. 39. The Mirantis WayOnce upon a time we were a software engineeringcompany that did a little bit of everything…. 39
  40. 40. The Mirantis WayThe day OpenStack was announced, we decided toresearch it further and build a private cloud for ourinternal IT 40
  41. 41. The Mirantis Way Lauren said, I should do a MeetUp in the Bay AreaWe liked the technology…so I called Mark Collierand asked how can we getinvolved? Mark Collier said “I don’t know you so talk to Lauren Sell.” 41
  42. 42. The Mirantis WayWe figured the MeetUp would looklike this… and reserved a smallroom. But it ended up looking like this 42
  43. 43. The Mirantis WayAfter the MeetUp the word got out that we knowOpenStack… and people started calling us…Randy Bias fromCloudScaling calledand said he could Ray O’Brien fromuse a partner… NASA called and said Some people from Nexenta that all his staff left to open you don’t know called and said OpenStack Startups they are interested in OpenStack 43
  44. 44. The Mirantis Way So I came to our management and said: “How about we become an OpenStack company?”They said: “No, it’s stupid. We are a cloudservices company” I said: “Cloud Services? That doesn’t make sense!”“That’s because you are stupid,” – theyrepeated! 44
  45. 45. The Mirantis WaySo we called a professional marketing consultant –Geva Perry You should be an OpenStack company, and make a website that says so and buy some Google keywords and write some blogs about it and do more MeetUps! “OK, if the professional said so, let’s try it,” – said the managers. 45
  46. 46. New WebsiteOld Website 46
  47. 47. Mirantis Today• Founding sponsor and influencer of the OpenStack foundation• Largest OpenStack services company in the world• 60 OpenStack consultants• Two dozen OpenStack customers• Growing at 100% a year 47
  48. 48. Thank You! Boris Renski b@renski.com @zer0tweets 48

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