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September 2, 2015

Intel: Nurturing OpenStack’s Big Bang evolution

C-level briefing: Jonathan Donaldson, GM, Software Defined Infrastructure, Cloud Platforms Group, Intel talks to CBR about what is driving interest in OpenStack, its investment in Mirantis and differentiating to not compete on cost.

By James Nunns

While OpenStack may only be five years old, it is gaining a lot of attention and companies like Intel and Google are getting involved to help drive enterprise maturity.

Donaldson sees OpenStack’s quick rise as being like a "Cambrian explosion" of interest over the past 18 months from not just customers and vendors, but also developers in general.

"I think it went along and then boom, a big explosion in interest so now we are actually starting to see where we need to go and do x, y and z to really increase the mainstream adoption."

Behind the adoption, he identifies the influence of companies such as Google and Amazon on small and medium cloud service providers wishing that they could offer a self service portal to their end users or to give API access to developers.

"When you look at what’s happened in the large public cloud providers, once you give that capability to them and significantly lower the unit cost of those resources, you get this thing called a Jevons paradox that kicks in."

He believes that coupling ease of access and the lower unit cost is allowing people to use more and to do more interesting things, for example Uber.

"You have the right combination of let’s try it out, if it works – great…if it doesn’t work then we’re out a hundred bucks and some time – it’s not a big deal."

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Although there is a growing ease at which businesses can use cloud services, he feels that there are differing levels of maturity based on the maturity level of your IT.

"If you look at the financial services industry, IT has grown more and more strategic to their business as they transition from paper trades to electronic trades. So as a strategic driver for their business they have been at the forefront from an enterprise perspective."

AWS was frequently mentioned during the interview, with its market share hard to ignore. Donaldson sees that it’s important to find a differentiator so as not to compete on cost.

"They are looking for all those differentiators that are not cost, because if they continue to be cost then nobody wins. Because then it just becomes this competitive arms battle for thinner and thinner margins."

A lot of tier two CSP’s have decided that it doesn’t make sense to compete with AWS on a per VM per hour cost: "That’s not going to draw people to me because once you get down to paying 15cents an hour of 16 for a VM, that’s not really all that meaningful.

"So you have to differentiate on something else like do you get my application up a week sooner."

For its part, Intel sees OpenStack as a strong private cloud option, but he acknowledges there is more maturity that needs to happen for enterprise workloads, which is one of the reasons why it has invested again in Mirantis.

"We’ve already been invested with Mirantis, but the additional investment along with some engineering support with Mirantis is to drive again some more maturity, but very targeted and focused around areas like bare metal provisioning and scalability and storage integration."

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