Cloud Wars: Rackspace Seizes OpenStack, Is Dell Next?

In perhaps their boldest acquisition to date, Rackspace has purchased Anso Labs and are now firmly in control of OpenStack.  Anso Labs is the brains behind Nova, a key component of OpenStack that was originally built for NASA’s Nebula private cloud platform; NASA eventually contributed Nova to the OpenStack project.  Rackspace now controls 3 out of the 4 board seats for OpenStack, virtually owns 2 key software pieces the OpenStack code, and has cornered the market on OpenStack brainpower.

It’s no secret that OpenStack is a blazing hot open source project, but what is Rackspace’s true motive for this acquisition?  Some have speculated that Rackspace could move OpenStack toward an “open core” strategy, opening the door for a paid commercial version of the software.  However, that would be contrary to Rackspace’s DNA and is highly unlikely yet not out of the question.

What’s more likely, is Rackspace’s growing reliance on OpenStack represented too high of a risk for a company that has its eyes set on dominating Cloud computing.  I have always contended that Open Source is a development strategy not a business model.  Therefore, Rackspace’s business model was at risk because their open source development strategy hinged on the talents of Anso Labs.

Additionally, Anso Labs brings Rackspace new Cloud services capabilities in the areas of consulting, training, support, integration, and customization of both OpenStack and Nova. Imagine Rackspace offering their customers the ability to build their own private clouds while augmenting them with their public and/or hybrid cloud offerings.  In essence, OpenStack to Rackspace becomes Eucalyptus to Amazon.

Where there is brilliance in this acquisition there are also risks.  Will the team at Anso Labs accept their new owner’s vision and/or plans? What happens to OpenStack’s growing community of participants and contributors?  Will the bright lights of the free spirits of Anso Labs be extinguished by the weight of a public company?

Finally, an unintended consequence of seizing control of OpenStack may be making Rackspace a M&A target themselves.  While Lanham Napier, Rackspace’s CEO said, “We have not built our company to sell it” the market may think otherwise.  If JMP Securities analyst Patrick Walravens’ observation that investor’s main issue with Rackspace is “the capital-intensive nature of their business…capex guidance is up 41% from a year ago…” then an acquisition by an infrastructure provider may make perfect sense.  Is Dell Next?

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Can Cisco Eat their EMC and Have Their NetApp To?

With 2010 nearing a close, could Cisco be contemplating another major acquisition to complete their next generation datacenter portfolio?  The last glaring hole within Cisco’s portfolio is their reliance on outside vendors for storage solutions.

Over the past few months, Cisco has patiently watched as HP purchased 3Par, EMC purchased Isilon, and Dell is acquiring Compellent.  Meanwhile, EMC’s arch nemesis NetApp continues to grow and innovate in a tough economy.

Further complicating matters, is Cisco’s reliance on the VCE, a partnership between VMware, Cisco, EMC, and Intel.  It is no coincidence that the current Vblock VCE Reference Architectures specifies EMC storage offerings (CLARiiON, Symmetrix, and Celerra).

Not to be left out of the party, NetApp entered into  ‘collaboration’ with Cisco and VMware creating FlexPod that delivers ‘leading computing, networking, storage, and infrastructure software components’.  It seems that Cisco isn’t the only one hedging their bets as VMware exerts a rebellious streak against their parent (EMC).

Cisco’s future hinges around UCS being adopted as a true next generation computing platform without legacy baggage.  Cisco did not go to war with HP while potentially jeopardizing their relationship with IBM only to be saddled with the competing interests of three large companies.

In the past, I have speculated that Cisco should simply purchase EMC thereby owing a majority stake in VMware.  However is NetApp a better choice?  After all, does VMware need to maintain a ‘Microsoft’ level of independence from the server vendors?  Would HP, IBM, Dell, etc. be inclined to sell a product that lines the pocket of Cisco?

Only Chambers (ok perhaps Ellison as well) would be as bold to acquire an enemy of one of their strategic partners.  By acquiring NetApp, Cisco would be able to offer innovative solutions such as storage blades for UCS or even accelerate the adoption of FCoE.  Imagine a new Cisco Architecture with Cisco UCS, Cisco Nexus, Cisco MDS, Cisco FlexPod, and Cisco Management with the availability of VMware, Citrix, Red Hat, or Microsoft virtualization.

In the end, Cisco could offer a true end-to-end solution as they continue to lead within the edge and core routing markets with near dominance in the switching market.  Furthermore, Cisco would stand alone as the only integrated next generation data center provider that does not develop or sell enterprise class applications such as SAP, Oracle, Microsoft, etc.  In effect, they become the Switzerland of computing against their rivals.

The only question is how long will Cisco be able to ‘Eat their EMC and have their NetApp to’? Don’t look now, but perhaps Larry (Oracle) will crash this party and make the decision for then.

Oracle Takes Dead Aim At VMware’s Vision

Still wondering why Oracle purchased Sun?  Day One of Oracle’s OpenWorld 2010 cleared up at least one reason; Oracle has its own “stack” and it does not include VMware. 

When Sun was originally purchased by Oracle, my attention immediately fell to Sun’s virtualization assets and engineering talents.  Before the acquisition, Sun was amassing an arsenal of virtualization and management assets including xVM, VirtualBox, and Solaris.  If you factor in hardware development and JAVA, then Sun had everything they needed to “change the world.”  That is, everything except a track record for translating engineering into revenue.

Love him or hate him, Larry Ellison has no such issues.  His track record speaks for itself as Oracle has an uncanny ability to execute.  With the launch of Exalogic Elastic Compute Cloud, Oracle has signaled to the market that they are ready for a fight.  While most believe Oracle is gunning for Amazon Web Services, I believe hidden in their messages and jabs at IBM is their true target of public, private, and hybrid clouds ala VMware.

VMware unleashed their vision of the future at VMworld 2010 that included vSphere, vDirector, vCloud, vFabric, SpringSource, and more.  What’s missing?   Oracle would point to VMware’s ratio of vision to products, their lack of owning an operating system, and their dependency on third parties to deliver server power (I’ll give them storage as EMC is VMware’s parent company).  Oracle’s vision is unique in that they control the entire Cloud stack using proven technologies and deployments; unleashing the potential of Sun hardware, JAVA, and Fusion.

Exalogic Elastic Compute Cloud has a few things going for it:

  • Power – Scale Out and Scale In  
    Cores 96 to 2880, SSD 256GB to 7.7TB, RAM 768GB to 22.4TB, and SAS disk 40TB to 320TB
  •  Applications – JAVA and Fusion
     Oracle’s Applications as well as others that run on Oracle Solaris and Oracle Linux

Although, I’m not thrilled with Oracle’s reliance on InfiniBand, it makes sense given Sun’s product portfolio and expertise.  Also, we need to learn more about how you manage this system including orchestration via business process management solutions.  However, this is a great start for Oracle. 

One last thought, Oracle took a subtle jab at VMware, EMC, and Cisco when they proclaimed, “Run 1000s of existing applications” and “No Certification Required.”  Perhaps Ellison should not be picking a fight with Mr. Chambers at Cisco.  For the common denominator of vBlocks (VMware, xBlocks (Citrix), and rBlocks (Red Hat) is UCS and its momentum may be unstoppable.

Three Cheers: Cisco Unleashes a UCS Surprise with ‘xBlocks’

With today’s webcast and subsequent announcements, Cisco showed their continued focus and commitment to the UCS platform.  The results are breathtaking; a new B230 M1 ½ blade with 16 cores and 2048/4096GB of memory, a new Nexus 5500 series that doubles the port density of the previous generation 1U models for up to 960Gbps of throughput, and virtual appliances for both Virtual Security and WAAS.  Perhaps the most interesting announcement of the webcast focused on VDI (Virtual Desktop Infrastructure) sporting a partnership between Cisco, Citrix, and NetApp that I’m dubbing xBlocks.

Like vBlocks, xBlocks maintain their own Reference Architecture that was jointly developed by Citrix and NetApp and validated by Cisco as a CVD (Cisco Validated Design).  Unlike vBlocks, xBlocks shed VMware for Citrix and offer an implementation based on Citrix’s XenDesktop infrastructure.  Additionally EMC is swapped for NetApp as they are the perfect non-competitive complement to Citrix.

While Cisco is heavily invested in VMware, this announcement demonstrates Cisco’s desire to broaden the UCS audience.  Of course, this isn’t the first time Cisco has ventured from VMware’s path as in June of 2010 Cisco announced a strengthening of their relationship with Red Hat and their KVM hypervisor.

Finally, Cisco confirmed 1700 UCS customers worldwide with 200 Unified Computing Authorized Technology Providers (ATP).  This means that Cisco almost doubled the total number of UCS customers from the quarter before.  If anyone doubted Cisco’s ability to disrupt the server market, then these numbers clearly demonstrate that Cisco is succeeding at an alarming rate to their competitors.

Is Cisco blowing up the old notion that innovation only comes from start-ups or small companies?  Are Chambers’ course corrections leading to a right hand turn and the complete transformation of an industry giant?  Is HP focused on this market or are they too busy buying and integrating companies?  Is Larry pacing his mansion contemplating how to leverage Sun to get into this fight?

Three cheers to Cisco:  innovators without baggage, partnerships without exclusivity, and a platform that is breathtaking.  What’s next, I can’t wait!

CA buys 3Tera: Playing the Cloud Computing Field to find a Diamond in the Rough

CA has announced the acquisition of 3Tera for an undisclosed amount of money.  Like Cassatt, 3Tera is a pioneer in cloud computing and they will join CA’s ever expanding list of acquisitions within Cloud Computing Management.  3Tera is home to AppLogic which started off within Grid Computing and has now morphed into a Cloud Computing Platform.  Per 3Tera’s website, “AppLogic is a turn-key cloud computing platform for running and scaling distributed applications.”

It seems that CA is engaged in “a throw spaghetti at the wall and see what sticks” method of M&A.  Only two of CA’s last four acquisitions have sustainable/notable customer lists (per their respective websites), at least two of the acquisitions have technology overlap between themselves and/or other CA products, and one acquisition may have come with few customers yielding little revenue.  Of course, this may be indicative of the space itself as Microsoft has revealed that revenues are years away from Cloud Computing providers.

Perhaps CA is attempting to become the “arms dealer” of Cloud Computing Management, but that’s a tall order for any company.  HP has spent billions on notable software companies such as Opsware, Peregrine, and Mercury Interactive.  BMC has added BladeLogic, Tideway, and Phurnace to integrate within their Remedy/Atrium products.  Meanwhile, VMware/EMC, Microsoft, and Citrix continue to beef up their management portfolios along with a host of start-ups and disruptive virtualization management companies.   IBM has recently acquired Intelliden to plug a hole within their Tivoli management software and they are the fathers of autonomic computing.  Finally, Cisco lurks as an ever present threat within this space.

For CA to be successful, they must not only continue the development and integrate these products into a single solutions suite, but they must execute on a coherent marketing and sales strategy.  With BMC set to fill the management void left by the rift between Cisco and HP, CA may look to Juniper, Brocade, or perhaps Huawei as potential partners.  If not, CA will be forced to compete with Cisco, HP, and IBM on the back-end of these next generation datacenter build-outs with a management agenda that is often an after-thought.

While I wouldn’t count CA out, they have a lot on their collective plates.  Will CA be able to quickly expand 3Tera to support VMware?  Will CA figure out what to do with Cassatt?  Will CA open new markets to NetQoS?  What about security management?  What will CA do to counter IBM’s purchase of Intelliden?  Will CA’s properly package these new products?

How many acquisitions does it take to create a market within Cloud Computing Management?  One…NetQoS…Two…Cassatt….Three…Oblicore…Four….3Tera….Five…

It’s a great time to go shopping for companies that have money and CA is definitely playing the field in search of that diamond in the rough.

For the Datacenter, Forget E=MC^2, Sav= (MC^4+AV) Sec

Why do we need Cisco UCS, HP Adaptive Infrastructure, IBM Stratus, Liquid Computing, and more? 

Savings
equals…

Management
Management is a critical component of any datacenter.  A datacenter may be defined as a symphony of hardware and software spanning multiple disciplines that is expected to be “always-on” and never to fail.  If you couple this with advances in virtualization, the “green movement”, and the need to understand a complete Total Cost of Ownership (TCO) of datacenter operations, then management is the only answer.  Management is not intended to replace the human element, rather to augment it through automation that allows human beings to tame an ever complex environment.

Examples of this renewed interest in management are plentiful; HP buys Opsware and Mercury Interactive, BMC buys BladeLogic, Cisco partners with BMC, Cisco UCS Manager, EMC buys Configuresoft, Voyence, SMARTS, and Infra, and more.

Current
Current, also known as power, usage within the datacenter continues to increase at a staggering rate.  In fact, the price for said current may actually outpace both the IT equipment and the facility itself.  It’s not simply servers, but routers, switches, wan acceleration devices, security devices, sans, nas, lights, laptops, monitors, and more that cause the bills to continually increase.  Couple this with the additional demands of cooling and redundancy and you have a real crisis on your hands.

An example of changes in the industry may be seen in ActivePower’s efforts in the areas of power and environmentally friendly “green” solutions.  Additionally, we might have been given a glimpse to one answer to this problem, as Google has made a $10 million investment in eSolar; inventors of Utility-Scale Solar Power.

Cabling
Cabling is an essential ingredient to any datacenter design and one that has the potential to provide significant cost savings in the next generation datacenter.  It started with the blade server revolution including embedded switches, and may very well end with Cisco’s UCS, HP’s Adaptive Infrastructure, or IBM’s Stratus datacenter initiatives. 

Illustrating this point, Cisco has published a case study with Saint Joseph Health System (SJHS) in which the hospital claimed an 85% savings in cabling costs by using the Cisco Nexus equipment.

Cooling
Current generates heat, heat requires cooling, cooling requires current, and around-and-around we go.  In the old days, you simply purchased the appropriate amount of cooling to keep your datacenter at a cool and constant temperature.  Today, upwards of 40% of your datacenter energy bill is from cooling.  Additionally, we have “green” concerns and use PUE (Power Usage Effectiveness) and DCE (Data Center Efficiencies) metrics to calculate how well we are doing and compare datacenters against others.  Incidentally, chillers, humidifiers, and CRAC’s (Computer Room Air Conditioning) contribute handsomely to these calculations.

A concept called adaptive cooling is a promising technology to solve the cooling challenge.  The premise is today’s equipment manufactures build systems that are more reliable and are designed to “handle the heat.”  Sensors are used to form baselines and models that are used to optimize modern cooling techniques.  Yahoo improved cooling and energy savings of 31% by partnering with SynapSense.

Capacity
Once thought to be endless, datacenters are rapidly running out of capacity.  By capacity, I am referring to everything from floor space to power and cooling to facilities themselves.  This has lead to the innovation of a “datacenter in a box” which is offered by the likes of Sun, Rackable, HP, IBM, and more.  These containers allow datacenters to expand rapidly while offering innovative power and cooling options.  However, space alone won’t solve the capacity issue.  Therefore, the efforts by Cisco, IBM, HP, and others to create a new datacenter fabric that combines massively dense servers, storage, networking, security, and virtualization are so important.

Look no further than Facebook who has started construction on a custom datacenter with over 140,000 square foot capacity at a cost of $188 million.  Note that they are touting the efficiency of this new datacenter including the potential of power and cooling cost savings.

Agility
As Ronald Reagan famously said, “Mr. Gorbachev, tear down this wall!” so too can we proclaim the tearing down of the walls between the silos within the datacenter.  We no longer can allow storage, networking, servers, security, applications, facilities, and more to operate independently of each other.  By operating as a unified team, the datacenter becomes more agile, proactive, efficient, and better equipped to handle all challenges. 

Examples of this movement is detected within software vendors (BMC, HP) unifying the management of these disciplines and hardware (Cisco, Juniper, Brocade) vendors integrating the functions into a single chassis.

Virtualization
No equation of savings within the datacenter would be complete without discussing virtualization.  While the ideas of virtualization have been around for years, it’s the application of this technology that has changed the industry forever.  Advances in network, server, application, and storage virtualization impact cost savings across the equation.

Examples include VMware vSphere, Citrix XenServer, Sun xVM, Cisco UCS (Nexus 1000v), Arcadia (Cisco/EMC JV)

Security
Security has and will continue to be a major concern within the datacenter.  The number of attacks and sophistication of these attacks continues to rise.  With the advent of Cloud Computing or shared services running on a common platform, the potential risks of a security breach are enormous.  Additionally, security must span all the disciplines within the data center while taking into account user access/privileges, data (in-motion and at-rest), and more.  Finally, security must continue to evolve while adhering to compliance and regulatory pressures.

Recent activities in this area include Cisco acquiring Rohati, SAIC purchasing CloudShield, the growth of Tufin and AlgoSec, and next generation firewall providers such as Palo Alto Networks.

VMware and SpringSource; Getting Warmer

VMware announced the acquisition of SpringSource for a total of around $420 million. SpringSource provides a opensource Java development platform but they also own Hyperic an opensource management platform; a fact that is being virtually ignored by the mainstream media.

While SpringSource’s Java development platform is “interesting”, nobody gets rich selling or supporting a development environment. However, what’s more interesting is SpringSource’s vision of Building, Managing, and Running applications; one of the driving forces behind their purchase of Hyperic.

Take this vision and expand it into VMware. SpringSource will build the applications, vShere will run the applications, and a combination of Hyperic and VMware will manage the applications. Sadly, Hyperic will not solve all of VMware’s management problems, but it’s a move in the right direction.

There are two fundamental risks with this strategy; VMware’s continued reliance on Java (Oracle) for Platform-as-a-Service (PAAS) and VMware’s commitment to opensource. While Java is a wonderful platform, there are questions regarding its future as well as new and more modern platforms that are challenging its dominance.

While VMware claims to maintain a long history of support for opensource, its more of a self-serving position. With this acquisition, VMware has not only acquired a company but a community of users and developers. With a strong opensource challenge from Oracle/SUN, VMware would smart to harness this community asset rather than turn them into a newfound liability.

Aside from the fact that VMware may have overpaid for SprngSource (especially in this economy), SpringSource/VMware makes sense for both companies. VMware is getting a little warmer on their quest to becoming a datacenter powerhouse.

One word of caution: all companies, VMware, Oracle, Sun, Citrix, IBM, BMC, HP, CA, and more are vulnerable until a new paradigm of management is brought forward. Management cannot continue to be an afterthought and a “central brain” is needed to make cloud computing a reality.

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