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OpenStack ‘more costly’ than VMware and Microsoft for private cloud

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6 May 2015

Scarcity of OpenStack engineers means the open source cloud management platform is more expensive for standing up private clouds when compared to proprietary software from the likes of VMware and Microsoft, according to a report.

Analyst firm 451 Research’s Cloud Price Index aims to provide a clear comparison of the costs of involved in the various approaches to on-premise clouds. The research found that while self-managed OpenStack clouds may initially be the cheapest option, a variety of factors including the need for expensive engineers to support the notoriously complex software means that the total cost of ownership (TCO) is often higher than other methods.

Skills availability
“Finding an OpenStack engineer is a tough and expensive task that is impacting today’s cloud-buying decisions,” said the report author, 451 Research senior analyst, Dr Owen Rogers, echoing customers at last year’s OpenStack Summit.

“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.”

There are a variety of approaches that businesses can take to building their own cloud using OpenStack’s open source software. This includes the ‘DIY’ route of downloading a standard version from GitHub and creating a cloud from scratch; deploying a supported distribution of OpenStack software available from various vendors such as HP, IBM and RedHat; and outsourcing control to a managed hosting provider.

On the other hand, there is proprietary virtualisation and orchestration software from providers such as VMware, Microsoft and Red Hat.

Costs lowered
As can be expected, the 451 Research report shows that average costs of a private cloud lowers steadily along the spectrum of proprietary software, OpenStack distributions and the ‘go-it-alone’ approach.

For instance, it found that using tools such as VMware’s vCloud Suite Advanced and Microsoft System Center plus Windows Server 2012 averages at $0.10 per VM hour, while OpenStack distributions with support costs are 20 percent lower, at $0.08. Self-managed OpenStack deployments with no support are the cheapest at $0.06.

Notably, the cost difference between proprietary vendors and OpenStack distributions is smaller than might be expected, particularly with VMware’s reputation for high costs.

But although self-managed OpenStack private clouds are the cheapest option, this is not the case when TCO is factored in. For instance, there may be a 33 percent price difference between self-managed OpenStack clouds and service provider distributions, but going it alone means forgoing benefits such as support, service level guarantees, easier installation and management.

More staff are required to build and maintain an OpenStack distribution that using more mature proprietary offerins, and even more are needed for self-managed systems — often regarded as a riskier approach.

This means, for those intent on deploying an OpenStack cloud, there is a clear advantage in using supported software distributions at this stage, the report contends, and even proprietary software turns out cheaper when factors such as cost of skills are counted up.

Of course, as the report author points out, cost is not the only factor in creating an OpenStack cloud – avoiding vendor lock-in is one of the principle drivers for adoption, but businesses must be prepared to pay for this freedom.

Rogers said: “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.”

The positive note for the OpenStack community is that some of these cost issues will likely be resolved in time. First, as the software matures it should will become easier to operate, requiring fewer engineers to run it.

Also, as the pool of OpenStack expertise grows, the cost of hiring an OpenStack engineer should come down too. Currently the average wage for an OpenStack engineer in the US is $126,000 (€113,000), according to salary comparison website This compares to an average of $91,000 (€81,360) for VMWare, Red Hat and Microsoft engineers.

“As OpenStack matures and the pool of available engineering staff increases, buyers can expect the TCO of deploying OpenStack to improve.”



Matthew Finnegan, IDG News Service

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