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How to Make Money with OpenStack

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This is the deck from Boris Renski's presentation at the APAC OpenStack conference on August 10th, 2012

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How to Make Money with OpenStack

  1. 1. MAKING MONEYON OPENSTACK Boris Renski b@renski.com @zer0tweets
  2. 2. China and Russia are alike! 2
  3. 3. We love gymnastics! 3
  4. 4. We love chess! 4
  5. 5. …and we love money! 5
  6. 6. When most people think of OpenStack, they imagine this… 6
  7. 7. When I think of OpenStack, I imagine this… 7
  8. 8. The four questions:1. Is there $$$ in OpenStack?2. How much $$$ is there?3. Why is it easier to get than from “other stacks?”4. How do you get the $$$? 8
  9. 9. Is there $$$ is OpenStack? 9
  10. 10. Premise 1: cloud is BIG $$$ 10
  11. 11. Premise 2: cloud will be open …why…? …because cloud pioneers show thatopen is the way! Enterprises will follow in time. 11
  12. 12. Premise 3: OpenStack won open cloud warsAverage # of developers in an IRC channel as of 6/18 12
  13. 13. Premise 3: OpenStack won open cloud warsOpenStack is the #2 FOSS foundation1. The Linux Foundation = $9.6M2. Openstack = $6M3. Mozilla Foundation = $1.9M4. The Apache Foundation - $0.53M 13
  14. 14. Premise 3: OpenStack won open cloud wars3. OpenStack is the fastest growing open source project inhistory… 180+ organizations, 3000+ developers 14
  15. 15. Summary• IaaS technology is disrupting a huge infrastructure software market• Open source cloud is not a “cheap alternative” to proprietary, it is the dominant standard in IaaS market• OpenStack is the unchallenged leader in open source IaaS 15
  16. 16. How much $$$ is there? 16
  17. 17. How big is OpenStack market?Market: Total amount of IT spending influenced by OpenStack.Revenue Streams: Hardware, Software, Services Hardware Services Software 17
  18. 18. 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• Growing at 30% 18
  19. 19. OpenStack is disrupting a $15B market.Nobody knows the exact market size, but everybody knows that the market is… Very Nice! 19
  20. 20. Why is it a better investment then “other stacks?” 20
  21. 21. 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 build money 21
  22. 22. 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” 22
  23. 23. How do you get the $$$? 23
  24. 24. 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 24
  25. 25. 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 25
  26. 26. 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 26
  27. 27. 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 27
  28. 28. 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 28
  29. 29. “It’s Complimentary” campOpenStack as an enabler for selling core product / service 29
  30. 30. The Mirantis Story 30
  31. 31. The Mirantis WayOnce upon a time we were a software engineeringcompany that did a little bit of everything…. 31
  32. 32. The Mirantis WayThe day OpenStack was announced, we decided toresearch it further and build a private cloud for ourinternal IT 32
  33. 33. 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.” 33
  34. 34. The Mirantis WayWe figured the MeetUp would looklike this… and reserved a smallroom. But it ended up looking like this 34
  35. 35. 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 35
  36. 36. 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! 36
  37. 37. 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. 37
  38. 38. New WebsiteOld Website 38
  39. 39. 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 39
  40. 40. Thank You! Boris Renski b@renski.com @zer0tweets 40

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