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What Does An Open Cloud Mean For The SaaS Model?

One of the most important decisions pertaining to developing and delivering Software-as-a-Service (SaaS) solutions is choosing the right Infrastructure-as-a-Service (IaaS) architecture. Making the right architectural choice is essential because it will influence the scalability, flexibility and economic viability of the SaaS vendor’s solutions.

There are various architectural approaches to supporting SaaS development and delivery vying for vendor business. These range from proprietary vendor-centric platforms to open source oriented environments.

The tradeoffs are both clear and subtle. In the case of the vendor-centric platforms, a SaaS company must make a big bet on not only the vendor’s technical capabilities, but also its long-term strategic direction. The most obvious risk associated with moving in this direction is vendor lock-in. Depending on the nature of the vendor’s platform; the SaaS company may be at the mercy of the vendor’s every technical and strategic move. And, if the SaaS company becomes unhappy with the technological or strategic direction of the vendor, it may have to make a significant investment in re-architecting its SaaS solution in order to migrate it to another IaaS provider.

I’ve always believed that the SaaS and cloud industries owe a lot to the open source movement. In fact, I published a commentary almost exactly two years for Ecommerce Times identifying three key forms of innovation of the SaaS/cloud operating model which can be directly attributed to open source principles and byproducts:

  1. technological innovation
  2. business model innovation
  3. community-building innovation

Technologically, the open source movement has perfected the use of crowd-sourcing to generate continuous innovations which enhance and advance the functional capabilities of software and systems on an ongoing basis. Because every user has a stake in the quality of the solution being high in order to support their technical requirements, open source solutions have gained widespread acceptance and growing adoption. Linux-based technologies in particular have become mainstream.

The open source business model has also become widely recognized with free, shared versions of open source solutions that are readily available often being trumped by commercial versions which promise even more features and more formal support services. It is the support services which are of greatest appeal to most business users that want to ensure the availability and performance of the solution.

And, the open source community not only generates continuous technological innovation but also produces important industry best practices and benchmarks for success.

These same principles are now taking hold in the cloud and fueling the rapid growth of the OpenStack architecture. The goal of OpenStack is to:

“produce the ubiquitous open source cloud computing platform that will meet the needs of public and private cloud providers, regardless of size, by being simple to implement and massively scalable.”

Practically speaking, OpenStack is a cloud operating system designed to help users manage large pools of compute, storage and networking resources throughout a datacenter, using a single dashboard so administrators can better control their cloud operations and provision resources through a web interface. Putting these ideas into historical perspective, THINKstrategies believes OpenStack is becoming the “Linux of the Cloud” – an open source platform capable of gaining widespread acceptance in the commercial/enterprise environment.

In the same way that Linux became a clear alternative to proprietary operating systems, THINKstrategies believes OpenStack will succeed in becoming a solid option for powering leading edge cloud services and corporate datacenter environments.

In fact, over 150 companies are already supporting OpenStack by providing technical input, contributing code and incorporating it into their operations and offerings. These companies span cloud service providers, software and system vendors, enterprise customers and academic institutions, including NASA, which co-founded OpenStack. In fact, eBay recently announced it is using the OpenStack open source environment to run some of its research and development (R&D) operations.  Click here to see the full membership list.

IT management solution vendor Zenoss conducted a survey in 2011 regarding OpenStack adoption that was completed by over 750 IT professionals who attended that year’s OpenStack Conference and are members of the Zenoss open source management community. Here are some the highlights from the survey findings:

  • 73 percent of participants were considering an OpenStack deployment.
  • The biggest drivers for considering OpenStack were cost (47 percent) and avoiding vendor lock-in (46 percent).
  • The adoption curve for OpenStack is steep with 40 percent of organizations planning to be operational within one year.

Although the major research firms haven’t published their own market size and forecast numbers, the continuous stream of companies endorsing OpenStack and offering solutions built around this architectural framework is a clear indication that a broad cross-section of companies are finding real value in aligning with this open source approach to deploying cloud services.

In addition to the functional benefits that OpenStack delivers, one of the most important strategic considerations is the ability to move your cloud-based applications across service providers or between various cloud environments. This prevents organizations from being locked into a single cloud service provider or specific cloud environment. This flexibility and freedom is essential for organizations that want to capitalize on various alternatives as their cloud computing and business requirements evolve.

It is for these reasons that THINKstrategies believes organizations of all sizes will be well-served to seriously consider and adopt OpenStack and an open cloud as a part of their overall cloud migration strategy.

About the Author

This is a post written and contributed by Jeff Kaplan.

Jeff Kaplan is the Managing Director of THINKstrategies, the only strategic consulting firm focused entirely on the business implications of the transition of the technology industry from a product-centric to services-driven solution model, including Software-as-a-Service (SaaS), Cloud Computing and Managed Services. THINKstrategies helps IT/business decision-makers with their sourcing strategies; solution providers with their marketing strategies; and venture firms with their investment strategies. Kaplan is also the Founder of the Cloud Computing Showplace, the largest, vendor-independent, online directory and best practice resource center regarding SaaS, Platforms-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS), including Managed Services. Jeff can be reached at jkaplan@thinkstrategies.com or 781-431-2690.


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