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Summary:

The private cloud world hasn’t been the same since OpenStack sucked the air out of the room. Here’s a look at the companies doing private cloud before OpenStack and how they’ve fared.

I like to think of the private cloud market as existing in two distinct eras — Before OpenStack and Anno OpenStack. It is now 3 A.O. (well, in a few months), and Oracle’s announced acquisition of Nimbula on Wednesday got me thinking of just how much the world has changed since OpenStack officially launched on July 18, 2010.

A report I wrote for GigaOM Pro in June 2010 (subscription req’d), entitled “Defining Internal Cloud Options: From Appistry to VMware,” seems like a good starting point for a private-cloud startup edition of “where are they now.” Ignoring the public companies on the list for the time being (with the exception of CA), here’s what has happened to the private companies and startups.

  1. Abiquo: Abiquo has a new CEO, a tight partnership with NEC around selling to service providers and appears focused on the European market. The company raised about $14 million in 2010, but hasn’t really made a lot of noise stateside since then.
  2. Appistry: Appistry made a huge shift in August 2011 and it now positions itself as a platform for running high-performance applications in areas such as life sciences, defense and financial services. Its biggest area of focus is genomics, where it is even developing new methods for analyzing genomes.
  3. CA: CA bought a bunch of cloud startups in 2009 and 2010 — Cassatt, 3Tera, Oblicore and Nimsoft among them — but it has been essentially silent since then in terms of real innovation. Maybe these acquisitions are driving big business, but I was expecting a more-visionary strategy in terms of fusing them into a cohesive and forward-looking whole.
  4. Cloud.com: Winner!!! Cloud.com had big-name users and workable technology, and it sold itself to Citrix for more than $200 million in 2011. It has since launched an open source competitor to OpenStack called Apache CloudStack and appears to be doing good business.
  5. Elastra: Elastra is no more.
  6. Enomaly: Enomaly’s products still technically exist, but Virtustream bought the company in 2011 with the primary goal of repurposing its intellectual property in the realm of cloud federation and gaining a toehold in China.
  7. Eucalyptus Systems: If you ask CEO Marten Mickos, everything is great with Eucalyptus, and its whopping $55.5 million in venture capital (including a $30 million round in April 2012) and tens of thousands of downloads of its Amazon-compatible cloud softwware are proof. Ask anyone else and they’ll likely tell a different story.
  8. GigaSpaces: GigaSpaces appears to be doing well enough, although it was around well before the term “private cloud.” It has always been much more about its in-memory data grid tech and apps that need dynamic scalability, although it does now offer a Platform-as-a-Service product that’s somewhat disconnected from the legacy business.
  9. JoyentJoyent has always been respected for its engineering chops, although rumors sometimes swirl about how much business the company — which has raised an incredible $115 million — is actually bringing in. Still, it continues to improve its public and private cloud offerings and has landed some big-name users.
  10. Librato: Librato looks to have abandoned its resource-management product line to focus on measuring stuff — sensors, server use, whatever.  It wears that hat well, and Heroku is among its loyal users.
  11. LongJump: In hindsight, LongJump’s business was not actually a great fit for that 2010 report, and its business appears about the same: you build apps in a user-friendly setting and they can run on LongJump’s infrastructure or your own.
  12. Morphlabs: Morphlabs is the master of pivots, although it’s still hanging around and pushing out new products. Now an OpenStack-based cloud-software vendor, it released a new service-provider-focused platform called mCloud Osmium in February.
  13. Nimbula: Nimbula, as noted above, is now part of Oracle in a move that is widely believed to be an “acquihire” situation, although neither company will comment on the details.
  14. Platform ComputingIBM bought Platform Computing in October 2011 and appears to have refocused the company around its HPC roots. Not that that’s a bad thing — Platform was a $72 million company on its own in a niche market, and I’d guess IBM paid a fair price for it.
  15. VirtustreamAnother winner! Virtustream has been on fire since 2010 (actually buying up Enomaly) and looks to be the darling of the enterprise cloud space. It’s primarily a public cloud provider, but it has a strong private/hybrid cloud business that ties Virtustream back to customers’ data centers.
  16. Voxel: Voxel, whose main business was a public cloud offering, got acquired for $30 million by managed hosting provider Internap in January 2012.

OpenStack is what happened to the private cloud market and forced so many acquisitions, pivots and even one closure. Users, investors and everyone, really, were waiting for some promise of cloud interoperability and portability (aka something other than Amazon, VMware or Microsoft) and OpenStack delivered it. Further, for the service provider community — which has arguably bolstered the sales of private cloud software since its inception — OpenStack provided a relatively engineering-free path to public cloud offerings (compared with building their own from scratch, that is) without fear of being at the mercy of a startup that might fold tomorrow and take its core technology with it.

I haven’t run the numbers, but I’d be willing to bet the majority of venture capital going toward “private cloud” in the past two years has gone to OpenStack-based startups. We’ve also seen nearly every large software vendor pin its cloud ambitions to OpenStack to some degree — Cisco, HP, IBM and Red Hat to name a few. Even Rackspace is now in the private cloud game thanks to OpenStack.

For buyers, a large, well-heeled and deep-pocketed community has to be more appealing than a disparate collection of startups all doing their own thing.

Structure 2012: Marten Mickos - CEO, Eucalyptus Systems, Chris C. Kemp - CEO, Nebula and Co-Founder, OpenStack, Sameer Dholakia - Group VP and GM, Cloud Platforms Group, Citrix, Jo Maitland - Research Director, GigaOM Pro

L to R: Marten Mickos of Eucalyptus, Chris Kemp of Nebula (an OpenStack startup) and Sameer Dholakia of Citrix at Structure 2012.<br />(c) Pinar Ozger

Who’s not doing OpenStack (at least in any meaningful way)? VMware, Microsoft, Amazon Web Services — all companies with their own intellectual property, huge user bases and lots of money to back their visions. They all also have strong public cloud connections (some, obviously, stronger than others).

The cloud startups from 2010 that are still arguably thriving today share similar characteristics. They’ve been big on engineering, won major customers early on and raised a lot of money to help them maintain through any tough times. All but Cloud.com, now part of Citrix, have a very prominent public cloud component, too — which appears critical for a truly seamless hybrid environment — but it has staked out its own claim as the anti-OpenStack.

All of the aforementioned companies are/were doing infrastructure as a service primarily, but we’re already seeing a similar thing happen in the platform-as-a-service space thanks to Cloud Foundry. Providers that weren’t part of that community are jumping on board, and it’s just a few established holdovers that look like they’ll be able to push forward without riding Cloud Foundry’s coattails.

Perhaps this is telling for how the future of anything at the infrastructure or platform layers is going to play out. You’re either really early and really good, or you wait for an open source project — OpenStack, Cloud Foundry, Hadoop, Open Compute, OpenFlow, etc. — and try to build on that. There’s following fast, and there’s following smart.

Feature image courtesy of Shutterstock user Alexey Repka.

  1. There’s no doubt that cloud is the next big thing. 2013 is a year of battles (between big players), and a year for startups to grow their market shares. CIO magazine recently featured “Top 10 Cloud Startups” list.. And guess who got spotlighted? Find out: http://www.dincloud.com/blog/cio-magazine-top-10-cloud-startups-spotlight-dinCloud

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  2. Overnight? Hardly.

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  3. Actually, what really “forced so many acquisitions, pivots and even one closure” was the slower-than expected adoption of private clouds by enterprises and telcos, and the ferocious competition from AWS. VCs got tired of waiting (only biomedical stuff attract long-haul series A funding these days, because of the brute fact of the FDA), and companies ran out of money.

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    1. Derrick Harris Thursday, March 14, 2013

      True, although I’d argue that VC money went to companies pushing OpenStack stuff instead. I don’t think private cloud as a market or investment opportunity would have vanished, but OpenStack shifted the center of gravity.

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  4. k

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  5. It appear that what OpenStack did to destroy proprietary cloud orchestration startups, open source DayLight consortium can do to L2-4 SDN platform startups.

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    1. Yup, especially if both Cisco and HP are behind it. Cisco has huge networking market share and HP in second place is larger than like the next 9 largest competitors combined.

      The rumors I have seen are that both Cisco and HP are collaborating on the Daylight project. I have also read that the project will screw over Nicira. I think Cisco is pretty ticked off with their “good partner” EMC…

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  6. I distinctly remember the conversation between Chris Kemp and the other two in the photograph above.

    Chris told them that OpenStack would crush them and he was right. Almost the entire IT sector is behind OpenStack. If you aren’t a major player already like AWS, then you will either join OpenStack or remain a niche player.

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  7. Vinod Shintre Thursday, March 14, 2013

    problem is that it’s also adding more confusion to the already complex cloud decision life cycle. but hey great to have multiple options to assess what works best.

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  8. Reuven Cohen Friday, March 15, 2013

    The writing was on the wall.

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  9. Sacha Labourey Friday, March 15, 2013

    Derrick,

    One correction on your PaaS comment near the end of your article. I think your link to the CloudBees/CloudFoundry announcement is misleading. We are not “Jumping on Board” any one community and haven’t changed anything wrt our RUNTIME PaaS strategy. This announcement is around our ability to deploy applications from our Jenkins-based Continuous Cloud Deployment (CCD) platform to Cloud Foundry (i.e. build&test at CloudBees, deploy to CF). We had announced something similar a few months back with Google App Engine: http://gigaom.com/2012/10/04/google-app-engine-taps-jenkins-for-continuous-integration/

    This is around PaaS openess (http://bobbickel.blogspot.ch/2013/02/clouds-introduce-new-era-of-openness.html) and the ability to chose vendors, this is certainly NOT about moving CloudBees to a Cloud Foundry codebase (neither to a GAE codebase for that matter…)

    Thanks,

    Sacha
    CloudBees, Inc.

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    1. Derrick Harris Friday, March 15, 2013

      Duly noted. I wasn’t actually suggesting a code migration, just the ability to launch on Cloud Foundry, as you noted. But I also erroneously linked to a post about OpenStack support, so it was irrelevant to this particular point anyhow.

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  10. Scott Herson Friday, March 15, 2013

    It’s still very early in this sector. Most of the companies above are not selling much and are just living off their VC funds. Openstack itself is still looking for large scale production case studies. IT vendors are “leveraging” Openstack but where are the customers? The consolidation will continue however with more “acqui-hires” and buyouts to control competitive landscape.

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