OpenStack could be a $5 billion industry by 2020

451 Research says private cloud will produce majority of OpenStack revenue by 2019

As the OpenStack Foundation kicks off its 2016 international conference in Barcelona this week, 451 Research has new predictions for how fast the open source cloud computing project is growing.

The research firm predicts that OpenStack revenues will grow by a compound annual growth rate of 35% in the coming years, ballooning to a $5 billion industry by 2020.

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To date most OpenStack revenues have been from multitenant IaaS public cloud use cases, 451 says, but by 2019 the majority of OpenStack revenue will come from private cloud deployments. “OpenStack’s success going forward will be in the private cloud space and in providing the orchestration for public cloud integration with on-premises and hosted OpenStack environments,” reads 451’s release announcing the latest estimates. Even with solid growth identified in OpenStack, 451 says so far most OpenStack deployments have been for hosting test and development workloads, web hosting and pilot projects.

“451 Research predicts a growing number of OpenStack use cases across software-defined networking, network function virtualization, mobile and Internet of Things by both service providers and enterprises,” it states. “This is in addition to traditional use cases in big data, DevOps, PaaS and serving developers and lines of business.”

According to findings of OpenStack’s own survey of its community, 70% of the more than 200 respondents to its semi-annual questionnaire claimed they have production OpenStack deployments. Thirty percent of customers in the survey were part of an organization with more than 1,000; another quarter of respondents had between 100 and 999 employees, showing that it’s not just small shops using the platform.

“We continue to believe the market is still in the early stages of enterprise use and revenue generation,” said Al Sadowski, research vice president at 451 Research. “We expect an uptick in revenues from all sectors and geographic regions, especially from those companies in the OpenStack Products and Distributions category that are targeting enterprises.”

While revenues seem healthy for OpenStack, it pales in comparison to some other cloud vendors. Amazon Web Services, for example, is on about an $11.5 billion annual revenue run rate this year.

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