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Changing Your Business Model with OpenStack

The expanding features available in OpenStack shows that momentum is building behind this initiative

In a recent presentation to Managed Service Providers (MSPs), I stressed that embracing standards had to be on their list of strategic priorities. Cloud solution success is based on a successful assembly of services from multiple providers for which standards play a key role. Included on that list should be OpenStack, the hottest open source project in cloud computing that has drawn the investment and attention of leading IT vendors like AT&T, Dell, IBM, HP and Red Hat. So, should you care about OpenStack?

Cloud-based disruptions in the IT industry began when Amazon started offering computing resources via its Amazon Web Service (AWS) around 2005. Citrix’s Cloud Platform (based on Apache CloudStack) had an early start in infrastructure standards but does not have a growth that OpenStack is enjoying. For virtualization, VMware is the gold standard for customers who wish to automate their datacenters and are actively attempting to complete the transformation to private clouds using their Software Defined DataCenter approach.


The OpenStack Foundation was the proud Diamond Sponsor of 11th Cloud Expo (2012)

As enterprises are being transformed by cloud computing, it becomes imperative for organizations to understand how to leverage it and respond with solutions in the marketplace. However, the significant leads that Amazon and VMware hold in their respective segments make it difficult for a single vendor to catch up, regardless of the effort invested. When Rackspace and NASA announced their cloud open source initiative followed by the launching of the OpenStack Foundation, some traditional IT vendors were left with few alternatives but to throw their weight behind OpenStack to provide alternatives to Amazon and VMware.

The expanding features available in OpenStack (as well as the growth of the size of the OpenStack summit held every six months) shows that momentum is building behind this initiative. Every IT manager should recognize OpenStack as an effective means of responding to the disruptive forces of cloud computing itself. With the movement towards automated systems, there is a strong need for organization to provide relevant information to their ecosystem that can be consumed by APIs.

As a result, every organization has to think of itself as a software company to differentiate itself from the competition. Leveraging cloud computing resources offers the capability to launch disruptive offerings at will with small investments and at lightning speed. The potential for a business to be disrupted by competitors appearing out of nowhere should give management a strong incentive to stay abreast of cloud computing.

How Can Openstack Transform Your Enterprise?
Let’s assume you are a small business manufacturing parts for an automotive company. As such, you do not have the capital to invest much in in-house IT equipment since though your design workload needs are very high, high performance IT is needed only sporadically. When required, you hire outside experts at premium costs to run design simulations for you.

There are a couple of engineers on your staff who think they can improve your products, but they need significant resources to run design simulations. They also approach management with the idea to leverage cloud computing resources in order to start some initiatives with in-house talent. While this has never been done in your organization you want to change the culture and to encourage taking measured risks.

Cloud Brokers: Beyond OpenStack/Private Clouds
You authorize your engineers to evaluate options using cloud delivered resources leveraging OpenStack. They rent software and infrastructure, utilizing resources delivered over the cloud. At the same time, they use idle resources from your own data center to complete certain tasks.

If there is no urgency to obtain results, you can utilize external resources at very low costs through cloud brokers. If results are time-sensitive, you have the capability of bursting to multiple external clouds to get more finish more quickly, as well as gaining much better reliability. The option of leveraging external computing resources at extremely low costs should be evaluated for changing existing business models.

Recent surveys show that CEOs see technology as the key differentiator enabling a business to compete in the future. Organizations need to arm themselves with the skills that allow them to meet future challenges. Every organization needs to think like a start-up, take measured risks, and become first movers towards disrupting the markets where they already enjoy a presence. Cloud computing powered by OpenStack should be evaluated to meet these business goals.

This post was first published on Robustcloud.com. Republished with permission.

More Stories By Larry Carvalho

Larry Carvalho runs Robust Cloud LLC, an advisory services company helping various ecosystem players develop a strategy to take advantage of cloud computing. As the 2010-12 Instructor of Cloud Expo's popular Cloud Computing Bootcamp, he has already led the bootcamp in New York, Silicon Valley, and Prague, receiving strong positive feedback from attendees about the value gained at these events. Carvalho has facilitated all-day sessions at customer locations to set a clear roadmap and gain consensus among attendees on strategy and product direction. He has participated in multiple discussion panels focused on cloud computing trends at information technology events, and he has delivered all-day cloud computing training to customers in conjunction with CloudCamps. To date, his role has taken him to clients in three continents.

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