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May 1, 2015

OpenStack fails in price comparison with VMware, Microsoft and Red Hat

A lack of skilled engineers makes the OpenStack solution more expensive.


OpenStack is failing to offer a cheaper solution compared to VMware, Microsoft and Red Hat due to a lack of skilled engineers and the cost of hiring them.

Having the cheapest private cloud offering for these companies is an important selling point, and it has been found that VMware, Microsoft and Red Hat all offer private cloud prices within half a cent of each other at $0.10 per virtual-machine hour, whereas OpenStack costs $0.08 per VM hour.

Despite this 20% saving, OpenStack is not offering value for money, due to the added factors of a lack of OpenStack skills and the cost of hiring engineers, which means that buyers could hire 3% more engineers to support a commercial cloud environment and still have a lower cost of ownership compared to OpenStack, according to one report.

Dr. Owen Rogers, senior analyst 451 Research, said: "Finding an OpenStack engineer is a tough and expensive task that is impacting today’s cloud-buying decisions."

"Commercial offerings, OpenStack distributions and managed services all have their strengths and weaknesses, but the important factors are features, enterprise readiness and the availability of specialists who understand how to keep a deployment operational."

"Buyers need to balance all of these aspects with a long-term strategic view – as well as TCO – to determine the best course of action for their needs."

"Decisions also need to include the risks associated with lock-in should prices rise, support dwindle or features be decommissioned. As OpenStack matures and the pool of available engineering staff increases, buyers can expect the TCO of deploying OpenStack to improve."

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The report, "In the Private Life of Private Clouds" also found that OpenStack can provide a TCO advantage over the typical DIY approach for deployment. However, this is only where its use results in a 45% manpower saving. Which the analyst firm believes is achievable when considering the simpler implementation and operations.

To have a TCO advantage, the right number of virtual machines needs to be found. The research found that to find value in a managed and public cloud an engineer must be able to support 100 VM’s.

If less than this, then an average managed cloud is likely to be cheaper, while for mission-critical, resource-intensive workloads installed on a private cloud, this ration is unlikely to be achieved.

Comparing the low price of a public cloud to the average cloud, makes this ratio for value even higher, with an engineer needing to support at least 250 VM’s.

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