The Appeal of OpenStack's Do-It-Yourself Cloud

Illustration by Tracy Ma

Hewlett-Packard has not ridden the cloud computing bandwagon very well.

Over the past few years, the company has watched, Microsoft, Google, and VMware build out vast portfolios of cloud services and software. Now and again, HP has rolled out a competitive service—for example, Upline (online storage) and Gabble (video sharing)—only to shutter them a few months later. In the next few weeks, though, HP will launch a true cloud for businesses, allowing customers to rent computing power, storage, and software.

HP based much of this upcoming cloud service on OpenStack, a set of open-source software. NASA and Rackspace drove the initial development of OpenStack, which makes it possible for companies to manage their numerous server and storage systems as a collective whole. You basically turn a data center into a single computer and rent out computing resources as needed, much as does with its cloud computing services suite.

The big pitch around OpenStack is that it offers an open-source competitor to the closed cloud services of Amazon, Microsoft, Google, and a handful of others. In that sense, it’s a lot like Linux—a standard system that lots of companies got behind at the expense of Microsoft’s Windows and proprietary versions of Unix from Sun, HP, and IBM. Huge service providers can build their clouds from scratch with OpenStack and rent them out to customers. Or more traditional businesses can use OpenStack to create internal clouds, which lets them divvy up data centers among various departments.

OpenStack backers include such names as HP, Dell, and AT&T—all of which have serious business to lose if Amazon continues to dominate the cloud or if Microsoft becomes a major force. Most of the rest of the OpenStack consortium are startups making specialized software and hardware for cloud services. Rackspace, which specializes in hosting services, has remained the main driver behind OpenStack out of necessity. After all, every company that chooses to run its software on Amazon’s cloud is a lost customer for Rackspace.

It’s early days yet for OpenStack, but it seems to have some momentum. “We’re coming up on our fifth design summit, and the conferences are getting bigger and bigger,” says John Engates, chief technology officer at Rackspace. “The number of companies that have joined has also exceed our expectations.”

Chris Kemp, a former chief technology officer for IT at NASA, helped bring OpenStack to life in a bid to give the space agency some first-rate computing power. He has since left to found Nebula, a Silicon Valley company that will start selling specialized hardware systems later this year for managing cloud systems based on OpenStack. Famed Silicon Valley investors Andy Bechtolsheim and David Cheriton (they put the original money into Google and VMware) have invested in Nebula, so expectations are running high. “If you’re looking at a cloud option, you can go to the old guard, like EMC and Microsoft, and pay for yesterday’s most-expensive technology to be integrated by today’s most-expensive consultants,” Kemp says. “Or you can build your own with open-source software.”

Peter Levine, a general partner at the venture capital firm Andreessen Horowitz, has kept a hopeful but cautious eye on OpenStack. Levine used to run XenSource, an open-source virtualization software maker that failed to keep up with its proprietary rival VMware. Thus far, Levine sees lots of companies grabbing the OpenStack code and giving it a whirl, but only Rackspace has really built a massive cloud service on the back of the software, and even it has only done a storage service so far. ”The OpenStack concept is great,” says Levine. “But we need to see large-scale deployments.”

There will be plenty of those, if Engates is correct about the appeal of the build-your-own cloud. “We see a lot of people who have started their businesses on Amazon and then want to diversify and sometimes have their own cloud,” Engates says. “The more a company starts to build into Amazon’s unique constructs and architectures, the more likely [it is] to be stuck there. This is the year I think we will see quite a number of companies try out the OpenStack approach.”

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