IBM All-in for FLOSS-based Cloud

“04 Mar 2013: IBM (NYSE: IBM) today announced that all of its cloud services and software will be based on an open cloud architecture. This move will ensure that innovation in cloud computing is not hampered by locking businesses into proprietary islands of insecure and difficult-to-manage offerings. Without industry-wide open standards for cloud computing, businesses will not be able to fully take advantage of the opportunities associated with interconnected data, such as mobile computing and business analytics.”
see IBM To Make Its Cloud Services and Software Open Sourced-based.

Cool, eh? The leading purveyor of servers and services in IT goes with OpenStack.

The Importance of Open Source in Cloud Computing

I agree. The same openness that made the web great will also make clouds great.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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4 Responses to IBM All-in for FLOSS-based Cloud

  1. Dr Loser wrote, “Rackspace might do well out of this, but I don’t expect you’re going to back up your apparent belief by rushing out and buying stock in them. I certainly wouldn’t advise it.”

    Strangely, RackSpace’s share-price has been volatile. They recently published record revenue and good growth but the stock was punished for being 1% below estimates of growth…

  2. Dr Loser says:

    So, Rackspace and IBM using the same software may actually benefit both businesses.

    A Pollyanna might claim that, yes. A dispassionate observer might wonder why Rackspace came up with OpenStack in the first place, if they didn’t want to diversify into IaaS (which has a far higher profit margin than competing against rival ISPs and providers of data centers).

    Neither of us has evidence either way, but I maintain that my suspicions are better founded than yours.

    A customer of IBM about configuring servers in the cloud may use RackSpace’s hardware.

    And then again, they may not. Without the added-value provided by a proprietary Cloud service, Rackspace have just commoditized their hardware.

    Which is what Sun did with their nitwit observation that “the network is the computer.” Well, maybe it is, but that computer turned out not to be a $1 million Solaris computer.

    IBM is in the business of commoditizing their complements. Hardware and hardware services are a complement to the Men in Blue Suits. Once they have five or ten different sources for an OpenStack solution, they have no particular need for Rackspace.

    Understand, I would agree with you (leaving IBM’s rapacious consultants to one side) that this is a Good Thing for the consumer.

    But it’s clearly a Bad Thing for Rackspace.

    And that Bad Thing is a direct consequence of following the Open Source model (I note you’re still copacetic about the Apache license, by the way. Ah well, comme ci, comme ca).

    Both companies win.

    One company is guaranteed to win, courtesy of a free gift. Heck, Rackspace and NASA have even established the product in the marketplace on IBM’s behalf. How very generous of them!

    The other company? Well, like I say, it’s a twentieth of the size. It has half the profit margins.

    Rackspace might do well out of this, but I don’t expect you’re going to back up your apparent belief by rushing out and buying stock in them. I certainly wouldn’t advise it.

  3. Dr Loser wrote, of OpenStack, “IBM are going to eat RackSpace for lunch, aren’t they?

    That’s the problem with giving away the source code. The source code, in many instances, is your competitive advantage. If you give it away to somebody like IBM (who incidentally has enough cash in hand to buy RackSpace outright, should they choose to do so), you are giving away your business.”

    RackSpace and IBM more of less compete in different arenas:

    • IBM mostly sells servers and consults about using them and setting them up.
    • Rackspace mostly sells service from servers it owns.

    So, Rackspace and IBM using the same software may actually benefit both businesses. A customer of IBM about configuring servers in the cloud may use RackSpace’s hardware. Both companies win. There may be customers one takes away from the other but because they use the same software it is easier for a customer to go either way and back again. It’s all good. We don’t believe the Internet is bad for businesses because customers could use either or both businesses. It’s the same with clouds. This cloud technology may bring both of them more business.

  4. Dr Loser says:

    First of all, Robert, it’s under the Apache license, so it doesn’t fit your definition of “free.”

    Secondly.

    RackSpace (originators of OpenStack): $10 billion cap, 8% profit margin.

    IBM: $200 billion cap, 15% profit margin.

    IBM are going to eat RackSpace for lunch, aren’t they?

    That’s the problem with giving away the source code. The source code, in many instances, is your competitive advantage. If you give it away to somebody like IBM (who incidentally has enough cash in hand to buy RackSpace outright, should they choose to do so), you are giving away your business.

    Still, it’ll be nice for all those blue-suited salesmen at IBM. I know how fond you are of salesmen in the IT business.

    Chuckle.

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