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Private cloud revenue to drive OpenStack come 2018

13 Nov 2017

Private cloud is expected to provide the majority of Openstack’s revenues soon, with deployments in APAC and China growing faster than the rest of the world.

Analyst firm c451 Research is forecasting OpenStack revenue to top US$6.7 billion by 2021, up from $2.5 billion this year, clocking a compound annual growth rate of 30% between 2016 and 2021.

While OpenStack revenue to date has been overwhelmingly from service providers offering multi-tenant IaaS, 451 Research says OpenStack’s growth is now shifting towards the private cloud space faster than previously expected.

The company says the OpenStack development community has made progress addressing challenges in installation and rolling upgrades over the last two years, resulting in increasing production deployments.

That is expected to continue in 2018 as OpenStack becomes ‘more shrink-wrapped’ and risk is reduced for enterprise use.

“The platform was once limited to mostily development/testing and proof-of-concept deployments, but there are now mission-critical workloads on OpenStack across nearly all enterprise verticals and regions,” 451 Research says.

It is forecasting service providers with OpenStack private cloud revenue will exceed revenue from service providers with OpenStack-based public cloud implementations next year as OpenStack benefits from increased demand for hybrid cloud environments.

Some verticals and regions that ‘are less enthusiastic’ about exclusively using hyperscalers are also presenting growth areas for OpenStack.

Al Sadowski, research vice president for 451 Research, says OpenStack has solidified its position as the leading open source option for building private and public cloud environments, but it is no longer the ‘shiny new toy’, with containers and microservices instead taking up that torch.

Despite that, 451 Resaerch’s OpenStack Pulse found very few OpenStack users abandoning the technology.

“In reality, some of the most innovative and progressive OpenStack deployments feature the use of container technology such as Docker and Kubernetes,” 451 Research says.

“While there is no clear answer yet about OpenStack co-existence with containers, it is worth noting that containers and container management are nascent markets in terms of production use cases,” Sadowski says.

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