You may be wondering about the viability of the market to support the 150 OpenStack technology startups. Well, there at least appears to be an exit strategy.
Three huge tech companies: Cisco, Oracle, and IBM, bought startups connected to OpenStack this week. OpenStack is the open-source cloud computing platform that lets anybody build Infrastructure as a Service (IaaS). Apparently the blueprint is to sell your company to Cisco, IBM, HP, or Oracle.
The big techno-giants are gobbling up OpenStack players at a healthy pace. This week’s deals included Cisco buying Piston Cloud Computing, the winner of one of our “fun cloud startup names” awards. IBM has acquired BlueBox, a private cloud provider based on the OpenStack platform. And Oracle bought the remnants of startup Nebula, a high-profile startup that had shut down in April.
It wouldn’t be right to leave HP out here, as that company has been on an OpenStack craze as well. HP Helion products are based on OpenStack, and it has made a number of deals in this area, including buying Eucalyptus last year. HP was recently the top contributor to OpenStack, just ahead of Red Hat.
Now here’s the catch: None of the terms of these deals were disclosed, which leads us to believe they are quite small. We all know that when a big firm makes a big deal it wants the numbers in the press release. Nebula was a scrap sale, because the company shut down. What about the others? They are clearly not massive headline victories, along the lines of the VMware-buys-Nicira for a $1 billion.
Nebula is now the poster child of OpenStack boom-and-bust. It was founded by former NASA Chief Technology Officer Chris Kemp, raised $40 million, and was considered one of the Valley’s “hot startups,” until it wasn’t. Veteran networking player CEO Gordon Stitt was brought in to replace Kemp and orchestrate the mop-up and sale.
Reading some of the Nebula marketing fluff, included in the shut-down notice, says it all.
“When we started this journey four years ago, we set out to usher in a new era of cloud computing by curating and productizing OpenStack for the enterprise.”
This is standard practice for OpenStack startups: We’re going to “curate” and “package” and “productize” your OpenStack.
The problem, is that says nothing about developing technology. The key words here are “curating and productizing,” marketing words that are meaningless. Is it just packaging? That’s all?
Of course all the companies that were acquired this week are slightly different. BlueBox has the most differentiation: It’s really a private-cloud provider, not just a packager of OpenStack but an operator.
But there are still dozens of startups out there with “OpenStack orchestration” on their startup slides, so it’s reasonable to ask how viable can a startup can be in the OpenStack world, where everything is open.
How can people pitch being the “Red Hat of Open Stack”? The biggest problem with this is that Red Hat is big into OpenStack. Chances are, Red Hat will be the Red Hat of OpenStack.
You may need to start wondering what all this activity means for Mirantis, another “hot” startup that’s pursuing this strategy.
This set of deals signals the beginning of the end of the OpenStack orchestration craze. If you are just “curating” and “orchestrating” OpenStack, time to get a new angle, because Cisco, HP, IBM, and Oracle are going to be all over that. Either that or take their offer now.