Author: John von Voros

From manufacturing to hospitality and government to finance, digital transformation is affecting every industry. One reason for all the attention – most organizations believe that half of their revenue will come from digital channels by 2020. Not to mention, The World Economic Forum estimates that the overall economic value of digital transformation to business and society will top $100 trillion by 2025. For service providers, this is causing a period of rapid change disruption to customers, bringing both stress and growth, but also opportunity.

A primary area of digital transformation is increased cloud adoption, especially in scenarios where a variety of cloud-based infrastructures require seamless integration. According to a recent study with 451 Research, “OpenStack: Enabler of Digital Transformation, How Service Providers Can Benefit”, multi-cloud scenarios are the norm, meaning that organizations increasingly need Cloud Management Platforms (CMPs) such as OpenStack.

As an open source-based technology, OpenStack benefits from constant innovations and improvements due to the contributions of a large community of developers including:

  • Cost Savings: Cost savings for operating a cloud infrastructure can be significant when using open source. In addition, open source allows individuals to avoid the hassles of license management (a huge benefit for service providers juggling several clients and licenses).
  • Support for Multiple Hypervisors: Open source platforms support a wider variety of virtualized environments, meaning, there is support for customers regardless of their hypervisor choices and thus offer broader coverage of infrastructure and flexibility.
  • Modularity and Flexibility: Open source platforms’ ability to coexist with other operating systems, hypervisors, cloud platforms and providers makes them very adaptable to a greater range of requirements.
  • No Vendor Lock-In: Companies can avoid dependency on a single technology offering or brand, thereby reducing the risk of lifecycle changes and unexpected price increases or licensing rules.
  • Community Involvement and Support: The active community members in open source platforms, including application developers, technology vendors and service providers—who offer advice and support to those looking to move into open source is becoming increasingly common to see collaboration.

However, OpenStack isn’t a cure-all for all customers. For example, service providers must be aware of some of these drawbacks to make informed decisions, including:

  • Complexity: Service providers often still see open source CMPs as toolkits for technically minded developers, and believe proprietary products are easier to use. Those that plan to take the DIY approach might indeed find this perception to be true, but it’s not necessarily the case with commercial distributions. Good support from a commercial open source vendor can help reduce operational complexity and overhead.
  • Fragmentation: While commercial distributions offer a range of options for using precompiled versions of open source code, this has led to concerns around fragmentation of the code base—particularly in OpenStack’s case. If versions become too differentiated, service providers and their clients may see a narrowing of features or functions. There’s a counterbalancing benefit, however. Precompiled distributions can help companies become operational faster, thus reducing time to market with new service offerings.
  • Reliability and Resiliency: Established proprietary cloud platforms benefit from technology maturity and well-documented updates. This is less so with open source CMPs—partly because of the variations in consistent code development and community support. The more established a CMP, the more a service provider can protect itself against issues of reliability.
  • Talent: For proprietary CMPs, formal certifications and training programs have created a ready supply of developers, engineers and others with skills in virtualization, orchestration and so on. While the OpenStack Foundation’s Certified OpenStack Administrator accreditation is an exception to the rule, finding experienced open source software experts is more difficult. The cost of hiring and retaining skilled developers may be prohibitive for some service providers.

Overcoming OpenStack Challenges

Solving these challenges is still possible, however it’s important to understand what makes great sense for some scenarios, might make less sense for others. For instance, outside of the North American market, people are still wary of trusting the processing and storing of data to a U.S. based vendor. In addition, legislation such as the General Data Protection Requirements (GDPR) in Europe is increasingly adding location and data transit rules to customer burdens.

On the other hand, if a service provider is working with customers in a regulated industry such as finance or health care, the challenges can come at a higher risk. There are often strict requirements that some applications and data run in-house or in a private cloud. This may rule out certain proprietary cloud offerings while creating the opportunity for open source cloud software like OpenStack.

Digital transformation is only possible when the right tools come together with the right support and expertise. When it comes to OpenStack, a commercial, enterprise-grade distribution of a CMP provides the right tool to help service providers capture an enormous market opportunity. Combined with the right expertise, companies can feel comfortable with their cloud transformation while avoiding many of these drawbacks.

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