451 cloud pricing report suggests OpenStack breakthrough

The necessity of embracing multi- or hybrid-cloud strategies at the enterprise level could prove a breakthrough point for OpenStack according to the Cloud Price Index report from 451 research.

"There's not going to be any easy answer to what cloud model is the best for every use," says Dr Owen Rogers, research director of the digital economics unit at 451 Research. "The results suggest to me that end users need to determine which cloud is best for that workload's needs – as a result, they're probably going to have a bunch of cloud models, at least in the foreseeable future, if they want to make sure they're getting best value across all their IT estate."

A finding from the report that's worth paying particular attention to is that it might be in the best interest of large enterprises, at certain scales, to run commercial private clouds.

According to the report, operating private clouds offers a lower total cost of ownership (TCO) when labour efficiency is at less than 400 virtual machines managed per engineer. When this scales up higher, the slowly-maturing open source OpenStack platform proves more affordable.

"I don't think this is bad news at all for OpenStack – essentially it means there is a time when OpenStack is better value than the other options," Rogers tells Computerworld UK. "You would assume things will only get better, as OpenStack becomes more mature – and there are better tools to manage them – I think the distributions already have a strong proposition against using the OpenStack source."

Of course, there are considerations about adopting OpenStackthat any business will have to take before making a commitment. "Most people who work with OpenStack are realistic and aware of the challenges," Rogers says. "There's a limited amount of field resources out there to build and manage OpenStack. Because of that it is commonly at scale when OpenStack is better value, whereas if you look at something like VMware or Microsoft, there are millions of engineers out there in the market who are used to it and who have experience. OpenStack is far away from it at the moment."

"But then again, the Foundation does now have a range of certifications – I imagine this will mean people get more qualified and there will be more OpenStack engineers in the market. Theoretically this could change the break-even point, at which OpenStack is better value than the commercial platforms."

Generally there are other considerations with adopting a multicloud or hybrid cloud strategy at all. Often, new customers will cite the simplicity of operational management as a principle reason for going with any particular vendor offering, and there is a convincing argument that hybrid and multicloud is a step away from that.

"The opportunity here really lies in brokers, because nobody wants to deal with multiple cloud providers, integrate them together, and get them all to work," Rogers says. "We found with the Cloud Price Index that end users who did use multiple cloud could save up to 74 percent on their direct expendiature. But the challenge is in managing all these different environments together."

"This is where the brokers have the real opportunity," Rogers explains. "They can be the ones who bring them all together, and they can do the management and the support element, so end users get all the benefits of being able to choose the best  cloud without having, necessarily, to manage them all."

For its part, 451 recommends that buyers use hybrid or multi-cloud in such a way that they can understand the best way to execute each workload – encompassing cost, management, the kit itself, and any other location requirements.

It is not too much of a reach to imagine private clouds become even more affordable – as inclusive all-in-one technologies like hyperconverged and composable infrastructure become more affordable themselves. Running an efficient private cloud locally could well just make more sense for certain applications.

"These have the advantages of high intensity on the hardware, they're very well integrated and so they should theoretically be easier to manage," Rogers says. "The tools all work together so they have the benefits of potentially cheaper running of the hardware, but also easier to operate and better density of utilisation."

More immediately, large enterprises like Apple and Dropbox have started to drop their public cloud offerings – in both cases this was AWS. Rogers believes that enterprises would be correct to analyse how private cloud and public cloud usage is changing over time: "If you're a startup and you start using public cloud there's bound to be a point when you reach a certain scale and think to yourself, perhaps now is the time to move to private cloud," he says. "Something worth noting is companies like AWS, Microsoft, even Google, have a lot of discounting schemes."

"If I was an end user already using public cloud, first of all I'd suggest they look at these things like reserved instances and subscriptions, to see if they can squeeze costs before taking the big jump into private cloud."

The data in the report suggests that public cloud pricing will continue to fall. But Rogers believes it's a "constantly evolving landscape – over time it might be that public cloud is cheaper in all circumstances, but I certainly don't think that's going to be for a considerable amount of time yet," he says.


Copyright © 2016 IDG Communications, Inc.

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