Startups and enterprises alike have placed their strategic bets to monetize the OpenStack wave in various ways. As an ecosystem insider and board memeber of the OpenStack Foundation, in his talk, Boris Renski will offer his views on how various organizations in the OpenStack ecosystem are trying to monetize it today. He will also share his perspective on what works and what doesn’t, based on his experience helping grow Mirantis’ OpenStack business to 100+ people in just under 18 months.

1. MAKING MONEY
ON OPENSTACK
Boris Renski
b@renski.com
@zer0tweets

2. In Soviet Russia people
drove cars like this!
2

3. In modern Russia, people
drive cars like this!
3

4. When most people think of OpenStack,
they imagine this…
4

5. When I think of OpenStack,
I imagine this…
5

6. The four questions:
1. Is there money in OpenStack?
2. How much money is there?
3. Why OpenStack vs. “other stacks?”
4. How do you make that money?
6

7. Is there $$$ in OpenStack?
7

8. CLOUD IS BIG +
CLOUD IS OPEN +
OPENSTACK IS THE KING OF OPEN CLOUD
=
…THERE MUST BE GREAT OPPORTUNITY HERE…
8

9. cloud is BIG
9

10. cloud is open
…why…?
…because cloud pioneers show that
open is the way! Enterprises will follow
in time.
10

11. OpenStack won open cloud wars
Average # of developers in an IRC channel as of 6/18
11

12. OpenStack is the king of open cloud
OpenStack is the #2 FOSS foundation
1 The Linux Foundation = $9.6M
2 Openstack = $6M
3 Mozilla Foundation = $1.9M
4 The Apache Foundation - $0.53M
12

13. How much $$$ is there?
13

14. How big is OpenStack market?
Market: Total amount of IT spending influenced by OpenStack.
Revenue Streams: Hardware, Software, Services
Hardware
Services
Software
14

15. Top down way to analyze
• VMware owns 59% of the market
• VMware license revenue for cloud
infrastructure is 1.6B in 2011
• Total market for cloud infrastructure software
is 2.7B
• Including hardware and services $15B
15

16. OpenStack is disrupting a $15B market.
Nobody knows the exact market size, but everybody knows that the market is…
Very Nice!
16

17. Why is it a better investment
then “other stacks?”
17

18. OpenStack was built for the community
OpenStack is the enabler for community
innovation….
• Started by a community
• Developed by a community
• Marketed by a community
• With the goal of enabling participants to add value
and make money
18

19. Alternatives are for the founding vendor
Alternatives, are vendor driven projects:
• Started by a single vendor
• Developed by a single vendor
• Marketed by a single vendor
• With the goal to create
a veil of “no vendor
lock-in”
19

20. How do you get the $$$?
20

21. Who do you sell to?
21

22. Who do you sell to?
22

23. Who do you sell to?
23

24. Who do you sell to?
24

25. Who do you sell to?
25

26. Who do you sell to?
26

27. Who do you sell to?
27

28. Who do you sell to?
28

29. What can you sell?
Infrastructure Vendors
Use Case • Ride the Hype
• Differentiate with “cloud.”
• Integrate with OpenStack to leverage market pull.
What can you sell? • Engineering services and expertise around OpenStack.
29

30. What can you sell?
Service Providers & Internet Application Vendors
Service Provider Use Case • Compete with Amazon
Internet Application Vendor Use Case • Dev/Test
• Standardize on infrastructure
What can you sell? • Mostly expertise and services
• Some support
• Some tooling
30

31. What can you sell?
Enterprise
Use Case • Alternative to VMware
What can you sell? • Engineering services
• Managed services
• Support subscription
• Tools
• VBlock-like OpenStack bundles
31

32. What can you sell?
Is this true
for OpenStack?
On-premise enterprise software is dead (roughly 50% infra spending)
• On-premise enterprise software growth at 2%
• SaaS software growth expected at 50%+
IDC
IaaS is growing at 100%/year with healthy enterprise adoption
32

33. The Ecosystem
OPENSTACK CAMPS
System Integration Support Software Hardware
OPEN BUT HARD: PROPRIETARY BUT EASY:
• Harder to deploy/adopt • Easy to adopt
• Easier to sell • Harder to sell
• Low risk – Low reward • High risk – High reward
33

34. Hardware Camp
PROS CONS
• Aligned with enterprise • Hard to penetrate the
buying patterns market
• Can sell through channel • Significant upfront R&D
• Leveraged business model investment
KEY PLAYERS
iPhone of OpenStack Best price-performance with The Incumbents
commodity components
34

35. Software Camp
PROS CONS
• Can be less R&D then • Enterprises are used buying
appliance VMWare, not cloud
• Hardware vendors can be a • Still need to invest in brand;
channel VARs don’t create demand
• Leveraged business model • OpenStack is free, no?
KEY PLAYERS
OpenStack for OpenStack for the Swift for SaaS Easy to install OpenStack
massive scale / enterprise; Vendors for everyone
webscale VMWare killer
35

36. Support Camp
PROS CONS
• Leveraged business model • Battle against incumbents
• Full use of OpenStack • Must have a brand
momentum
• Isn’t trivial to just sell
• Aligned with how enterprises support
buy open source
KEY PLAYERS
Support is what we do We own the cloud We own the We own mission
enterprise critical apps
36

37. SI Camp
PROS CONS
• Start monetizing with minimal • Business scales linearly
investment
• Will commoditize long term
• Learn while making money
• Full use of OpenStack
momentum
KEY PLAYERS
#1 SI in the OpenStack Small but smart; The Incumbents
Ecosystem we know HA
37

38. The Mirantis Story
38

39. The Mirantis Way
Once upon a time we were a software engineering
company that did a little bit of everything….
39

40. The Mirantis Way
The day OpenStack was announced, we decided to
research it further and build a private cloud for our
internal IT
40

41. The Mirantis Way
Lauren said, I should do a
MeetUp in the Bay Area
We liked the technology…
so I called Mark Collier
and asked how can we get
involved?
Mark Collier said “I don’t know
you so talk to Lauren Sell.”
41

42. The Mirantis Way
We figured the MeetUp would look
like this… and reserved a small
room.
But it ended up looking like this
42

43. The Mirantis Way
After the MeetUp the word got out that we know
OpenStack… and people started calling us…
Randy Bias from
CloudScaling called
and said he could Ray O’Brien from
use a partner… NASA called and said
Some people from Nexenta that
all his staff left to open
you don’t know called and said
OpenStack Startups
they are interested in OpenStack
43

44. The Mirantis Way
So I came to our management and said:
“How about we become an OpenStack
company?”
They said: “No, it’s stupid. We are a cloud
services company”
I said: “Cloud Services? That doesn’t make
sense!”
“That’s because you are stupid,” – they
repeated!
44

45. The Mirantis Way
So we called a professional marketing consultant –
Geva Perry
You should be an OpenStack company, and make a
website that says so and buy some Google keywords
and write some blogs about it and do more MeetUps!
“OK, if the professional said so, let’s try it,”
– said the managers.
45

46. New Website
Old Website
46

47. Mirantis Today
• Founding sponsor and influencer
of the OpenStack foundation
• Largest OpenStack services
company in the world
• 60 OpenStack consultants
• Two dozen OpenStack customers
• Growing at 100% a year
47

48. Thank You!
Boris Renski
b@renski.com
@zer0tweets
48