The OpenStack market is consolidating – quickly.
The moves are just the latest in a flurry of merger and acquisition activity in the cloud market in recent weeks: EMC bought Virtustream last month and a conglomerate of telecom companies purchased the comparatively small cloud hosting vendor named Codero.
For Piston and BlueBox, the moves represent successful exits for startup companies in the OpenStack market. While it’s a success for them, some may lament that it consolidates power in the market to more large vendors. One of the founders of Piston, Josh McKenty, who has since moved on from the company, recently said OpenStack has “lost its heart.” Most of the original startups companies in the OpenStack community have been bought – including Cloudscaling by EMC a year ago too.
Piston and Blue Box take very different approaches to the market.
Piston offers CloudOS, which is a software for building open source IaaS cloud based on OpenStack. Cisco purchasing the company rounds out its cloud strategy, which was already boosted last year by it buying another OpenStack startup named Metacloud. Combined, Cisco now owns two of the hottest startups in the OpenStack market – and all of their employees and intellectual property that come with them.
Blue Box is a somewhat unique OpenStack company. It offers what it refers to as a private cloud as a service – meaning it is a hosted OpenStack cloud that is single-tenant. Just this year Blue Box rolled out an on-premises version of its product, which allows a Blue Box system to be installed on a customers’ premises but be fully managed by Blue Box. In buying the company, IBM will offer customers more options for cloud. Much of IBM’s cloud strategy is centered around its SoftLayer IaaS public cloud, which also offers hosted bare metal servers. IBM also has a strong push in the platform as a service market with heavy investments in its BlueMix PaaS, which is based on open source Cloud Foundry.
OpenStack will now be driven by large vendors like Cisco, IBM, Red Hat, Rackspace. Oracle even bought up many of the employees of the shuttered OpenStack startup Nebula. Perhaps the largest remaining OpenStack startup is Mirantis, whose CEO has said he plans to take the company public next year.
There’s a whole new wave of OpenStack startups that have swooped in their take the place of these more mature startups that have been bought though. Expect, with time, for them to be gobbled up as well though.