23 January 2013 Posted by Paul Burns
A massive build out of cloud infrastructure by service providers – including global telcos, traditional hosting providers, managed service providers and new specialized cloud service providers – has been underway for more than five years. Some, like Amazon, have developed their own proprietary cloud platform software. Others, like HP, have chosen open source software – in this case from OpenStack. Still others, like Bluelock, have chosen proprietary cloud platform software – in this case from VMware.
With many thousands of hosting providers throughout the world – and a high percentage of them eager to add cloud services – the race is on for cloud platform software providers to win market share. In fact, there are more than two dozen players already competing in the cloud platform software segment. Some of them focus exclusively on service provider or enterprise deployments, while others target both. Surprisingly, still more are preparing to enter the fray. Neovise has previously created brief profiles describing 20 of these players. The list is a bit old and some of the descriptions / players are out of date, but you can still find it here.
In 2012, Neovise completed research on 500 of the largest service providers in the world that offer dedicated hosting. We found that 229 of them, or 45.8%, already offer cloud-based infrastructure-as-a-service (IaaS). Due to continued rollouts of new cloud offerings, more than half of all the largest service providers will offer cloud-based IaaS in 2013. While deployment of cloud services by mid-size and smaller providers is not quite as far along in terms of percentage, there are many, many more of them.
The number of cloud platform software vendors has always raised eyebrows. The question is, “just how many platforms can succeed in this space?” In a blog from 2010, titled The Growing list of Cloud Enabling Platforms, I wrote: “The list of vendors offering IaaS enabling platforms is growing rapidly. Unfortunately, not all of these vendors will succeed.” That is even more obvious today.
Those competing for market share within the service provider space are facing even greater risk than those tackling the enterprise, especially since about half of the largest service providers have already deployed. Winning those accounts now includes an extra challenge: displacing the incumbent. Interestingly, the leaders in cloud platform software are not as well known as they should be.
Based in large part on buzz as well as media and analyst coverage, I suspect many in the cloud industry would list the following players as the leaders in cloud platform software: OpenStack, VMware vCloud, Citrix CloudPlatform / Apache CloudStack. While each of these has unique leadership qualities, an important question – at least from the perspective of market penetration – is, “how many service providers have deployed each of these platforms?”
- OpenStack: Perhaps someone can enlighten me, but aren’t there between about a handful and a dozen OpenStack deployments, with Rackspace and HP as the most prominent?
- VMware vCloud: There are a couple hundred vCloud service providers listed on the VMware site, probably a pretty good estimate (and a healthy number too).
- Citrix CloudPlatform: Citrix tells me that about 75 telcos and other service providers have deployed this offering – very solid.
However, there is another extremely important cloud platform software vendor that that simply has not received the attention it deserves. OnApp with its OnApp Cloud serves over 500 servers providers worldwide. Any company considering joining the market for cloud platform software should take a close look at OnApp before committing. Existing players should do so as well, since the success of OnApp to date is not an anomaly.
On January 16, 2013, OnApp announced that it had closed a Series B round of funding, bringing total funding to more than $20 million. The company generates 40 percent of its revenue from the U.S. market, and is also seeing strong growth in Asia Pacific and Latin American markets. OnApp customers include major international hosting brands such as PEER1, GMO and UK2, as well as fast-growing Cloud Service Providers such as Dediserve and eApps. On average, their customers are seeing 5% monthly revenue growth, compounding out to over 80% annual revenue growth.
In addition to penetrating plenty of service provider accounts, the company has focused on making their provider customers successful. That is where the real battle for service provider clouds will be won or lost.
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