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A Journey to OpenStack Lessons Learned from Early Adopters Agatha PoonResearch Manager, Global Cloud Computing

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2Agenda3Where is the opportunity?What can OpenStack do?Why should we care?Key takeaways OpenStack regional snapshot

Well Developed East Asia & Pacific CountriesInvestment attention focusing on transformational markets of Japan, Korea, Australia, and New Zealand.Consolidation opportunities ongoing in IT savvy economies (Australia, Japan, Korea)The learning curve remains steep, but commercial deployments exist, driven by local cloud/hosting/managed service providers OpenStack is used by academia for the deployment of public/private/hybrid cloudsFast Growing China and IndiaStrong government support for innovation and balanced growth A wealth of talent-strong engineering and technical skillsChinese providers are eager to productize OpenStack-based services and technologies. OpenStack initiatives in India are backed by global technology giants and US-based vendors. Early adopters Academia, GovernmentEmerging ASEAN and other South Asian economiesGrowing choice in outsourcing locations, with Malaysia, Philippines, and Vietnam building credentialsSri Lanka leads the South Asian region in terms of human development indicatorsIn learning phaseVendor-driven projects and training programsEarly adopters-tech-savvy IT segment4

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Enterprise cloud journey

Cisco UCSNetApp FlexPodVCE VblockHP CloudSystem MatrixIBM PureSystemsDell Active SystemSource: InfoPro cloud computing, Wave 55Exciting Vendors, Technologies and Initiatives Source: InfoPro cloud computing, Wave 5Growth catalystsTrustworthy VisibilitySecurityNo vendor lock-inOpenStack is very exciting. We continue to use VMware for traditional environment. Large Enterprise, Services: Business/Accounting/EngineeringWe use Chef for the orchestration layer..and a bunch of other stuff. OpenStack is being examined to convert to at some layers. Large Enterprise, Financial Services6On-premise, Private Cloud Platform, Management and Automation Roadmap 7Source: InfoPro cloud computing, Wave 57An evolving landscape of OpenStack vendor ecosystemOpportunities exist to test, secure, integrate, and orchestrate disparate cloud assets for enterprises and service providers.

NSPs/SIsOpenStack Distributors DevOpsIT Services & TurnkeySolutionsOpenStack Service ProvidersPaaS on OpenStackHardware/Softwarevendors OpenStack with other cloudsGlobal OpenStack market sizing ($m)9Source: 451 Research Market Monitor, October 2013OpenStack service providers segment is the top revenue generator (E2013: $486m)Strong uptick in revenue is expected from OpenStack distributors (8.4% in 2014 from 3.5% in 2012)2012-2016 CAGR: 43%9

Projected revenue in 2013: By vendor type 10Vendor by categoryVendor count PaaS on OpenStack7OpenStack service providers14DevOps5OpenStack with other clouds 3Network service/Equipment providers7OpenStack distributors 4IT Services & Turnkey solutions8Source: 451 Research Market Monitor, October 2013OpenStack-based private cloud, bespoke deployment and consultingIt took over a year to productize OpenStack-based offeringsIts an ongoing efforts due to a very long development cycleImplementation challengesOvercoming product immaturity and lack of real testing performed on the code baseMaking sure patches run against production sites and not devstack is paramount11Key lessons learned You are insane to blindly follow releaseTristan Goode, CEO at Aptira Customers/ Use cases 10 deployments (6 of them are based on existing offerings, 4 deployments are based on a mix of in-house expertise and third-party OpenStack productsDev/ testPoC for scalability and federation Collaborative research Data analyticsAptira has been self-funded, but is looking to raise external funding to grow and own the OpenStack service provider space in India and across Asia-Pacific.

OpenStack-compatible productFusionSphere R3C10, the virtualization platform within Fusion CloudNext release-FusionSphere R5-will be based on all OpenStack components: compute, network, storage, and management services>1,000 engineers are involved in Fusion Cloud projectImplementation challengesNot enterprise-ready yetIncorporating all existing enterprise-level features into OpenStack, along with enhancing the compatibility of underneath virtualization platformKey lessons learned The ability to understand the disadvantages/ weaknesses of OpenStack is instrumental in driving successful deploymentsAddressing issues related to software upgrade and business migration CustomersGaining traction in the telecom and entertainment sectors, working with the top three Chinese telecom carriersMore than a dozen POCs around the globeHuawei will first bring OpenStack to enterprises and telecom customers. The ultimate goal is to become the Openstack enterprise solution provider.NTT Communications 13

NTT Communications will focus on enhancing service functions to support intranet users within and between business organizations.Product verification based on OpenStack-components~80 engineers and 450 patchesUse cases - office migration and flexible virtual office environmentTargeting Arcstar Universal One (VPN) users, the company has recently released a cloud service based on OpenStack.Implementation challengesError handling and transaction processingMulti-plugin for Neutron to address issues associated with concurrent use of multiple modulesConstant bug-fixing during internal testing

Key lessons learned Community-based OpenStack lacks error processing function, which is indispensable for service providersCommunity-based development effort is crucial to minimize development costs

CustomersIt was released less than a week.

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eNovance are currently expanding its operations worldwide, replicating business processes in many different geographies. Primary focus for 2014 is to grow its existing customer base outside of Europe.eNoCloud The continuous delivery of new features could be challenging- it took approximately three months to setup eNocloud, but one year to reorganize engineering around the notion of continuous deliveryEntire development team (~25) involved in various OpenStack projectsOne of the top ten contributors to OpenStack for the past three releasesImplementation challengesOpenStack feature gaps still existManaging growth while maintaining core values, and being able to evolve at its own paceKey lessons learned Stay agile Think out of the box - enforce its belief in open source without becoming just another service company

CustomersSome 200 clients ( consulting, managed services, and hosting) Safran/Morpho-OpenStack private cloud Cloudwatt-Openstack public cloudConsider eNoCloud as the demonstrator of its technology know-how, and a way to validate its developmentThe missing links: Who should take the lead?15Accelerating the commercial use of OpenStack using a well-defined, secure framework and standardized management processes.

Missing linksOpenStack TalentLimited functionalityFragmentation within the OpenStack communityProven productions are scarceIndustry consortia?The Foundation?LargeEnterprises?Individualcommunity users?Leading vendors/service providers?

Key takeaways Enterprise interest and demand have emerged as a main drivers for new projects.The crossover and convergence of enterprises and service providers offers vendors an opportunity to serve both markets.There are a handful of commercial deployments in Asia-Pacific, and the market for OpenStack is still defining itself.Global revenues for OpenStack-based offerings are relatively small today, but we expect them to grow rapidly.Demand for OpenStack expertise and experience presents itself as a major challenge.

16PublicationsLong-form report: The OpenStack Tipping Point, April 2013Market Insight report: OpenStack-related business revenue to exceed $1bn by 2015 as commercial models evolve, October 22, 2013

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Questions? Comments?agatha.poon@451research.com