VMware, Red Hat, and Microsoft all offer better total cost of ownership than OpenStack distributions for private cloud deployments, according to a recent 451 Research report that tackles private cloud pricing. The big cost difference comes down to premium compensation people that are qualified to operate OpenStack private clouds demand.
Cloud pricing is hard to navigate. Public cloud pricing is calculated over multiple variables, which are different for each provider. Private cloud pricing is arguably even less transparent and harder to benchmark. Private cloud is still largely procured like traditional IT, with price, design, and payment terms specified on a per-customer basis.
OpenStack provides a lower value predominantly because premium OpenStack talent is hard to find. The OpenStack private cloud market still faces a large talent supply-demand imbalance.
Despite this, a recent GigaOm survey commissioned by Canonical, the company behind the popular Ubuntu Linux distribution that also has its own OpenStack distro, found that more than half of private clouds deployed were OpenStack clouds.
One recent big-name user example is PayPal, which has switched from VMware to OpenStack for private cloud that supports its services. Another is Walmart, whose private OpenStack cloud has been serving online-shopping traffic since last year.
For small-scale enterprise private clouds, raw OpenStack pricing is lower than the others by about 20 percent, at 8 cents per virtual-machine hour. VMware, Red Hat, and Microsoft were all within half a cent of one another, at around 10 cents per VM hour. That gap disappears, however, when the cost of talent is factored in.
For a typical deployment, buyers could hire 3 percent more engineers to support a commercial cloud environment and still have a lower cost of ownership than an OpenStack distribution, according to the analysts.
However, several factors tip the scales back into OpenStack’s favor. As OpenStack matures and the pool of available engineering staff increases, buyers can expect the TCO to improve, according to 451 analyst Owen Rogers.
Other factors to consider, said Rogers, are the risks associated with lock-in, decommissioned features and dwindling support.
451 set a raw cloud pricing benchmark last November and has now expanded to the private cloud world. Much like the previous report, 451 uses "golden ratios" of virtual machines per engineer to assess cost.
They also found that professional OpenStack distributions can provide a TCO advantage over do-it-yourself deployments of the open source cloud software, since they simplify implementation and cut into the man-hour expense.
“Finding an OpenStack engineer is a tough and expensive task that is impacting today’s cloud-buying decisions,” said Rogers. “Commercial offerings, OpenStack distributions, and managed services all have their strengths and weaknesses, but the important factors are features, enterprise readiness, and the availability of specialists who understand how to keep a deployment operational. Buyers need to balance all of these aspects with a long-term strategic view – as well as TCO – to determine the best course of action for their needs.”