OpenStack growing at 35 per cent annually as private cloud increasingly favoured

Report by 451 Research predicts OpenStack revenues will be more than $5bn by 2020

Open-source cloud platform OpenStack is expected to grow at around 35 per cent per year, generating revenues of $5.8bn (£4.7bn) by 2020.

That is the conclusion of a report by analyst 451 Research which sees private cloud deployments gradually displacing public cloud ones as prices fall, regulations become more onerous, and as such deployments become easier to implement.

OpenStack is a multi-vendor initiative started by Red Hat and NASA with active support from a large number of technology vendors. So far, adoption has been predominantly by cloud service providers but 451 Research expects to see more enterprises take it up as it matures.

Revenues for 2016 are expected to be $1.825bn, up from $1.27bn in 2015 but well behind the leaders such as VMware in the private cloud and AWS in the public sphere. But as the hybrid cloud model, seamlessly combining public and private clouds, becomes more popular, so OpenStack is likely to be become increasingly attractive for mission-critical workloads.

New use cases around emerging technologies are also likely to work in OpenStack's favour, the report notes.

"While existing vendor relationships are often a key selection criterion for prospective OpenStack customers, there is also a growing desire to move beyond established vendors, particularly for newer initiatives around containers, microservices, mobility and IoT."

In particular, the growing use of open-source container technology such as Docker is mentioned in the report. This could play in one of two ways. On one hand containers are a key component of the OpenStack market, while on the other the increasing use of containers may eclipse the underlying platform, the report notes.

"OpenStack mind share continues to grow for enterprises interested in deploying cloud-native applications in greenfield private cloud environments and eliminating dependencies on proprietary software. However, its appeal is limited for legacy applications and for those enterprises already comfortable using hyperscale cloud providers such as AWS and Microsoft," it states.

Microsoft's Azure platform is one of the best-known and widely used public cloud services and is seen as the biggest competition for OpenStack. Other major cloud platforms such as Amazon's AWS and Google Cloud Platform are more compatible with OpenStack.

In the private cloud, meanwhile, the main competition is VMware, although Microsoft is working on its own private cloud platform, Azure Stack.

"By far the largest and most notable software giant not yet offering public support is Microsoft," notes 451 Research.

"Microsoft has a competing public cloud, Azure, and a competing private cloud offer under development in Azure Stack, and its preferred hypervisor is Hyper-V to the OpenStack's community's default, KVM."

Recent research by Computing found that 71 per cent of organisations polled were using or considering Microsoft cloud services, compared with a figure of 12 per cent for OpenStack.