My colleague, Margaret Dawson, spends a lot of time talking with customers. And in those conversations, questions about cloud and OpenStack invariably come up. She shared this message a while back, during her keynote at the OpenStack Summit in Vancouver, and it still resonates. While public cloud looms large in many companies’ plans, OpenStack’s future looks bright in the hybrid cloud reality we see today -- and tomorrow.

"Most of you, especially if you’ve been working on OpenStack for a while, hear ‘Game’s over. Why are we even still doing this? AWS has won, so let’s just put everything in the public cloud and call it a day."

"This is something I talk about often with customers around the globe," said Dawson, vice president of Red Hat’s portfolio product marketing. "What is real and what is not? What is the real situation with OpenStack with public cloud?"

In her session, Dawson shared statistics, data, and customer implementation information from Gartner, 451 Research, and multiple other third party insights, as well as Red Hat market research. When you add it all up, the reality doesn’t really match the hypothesis that workloads are only going to public cloud. Recent research reports indicate OpenStack has made significant gains, and that a majority of organizations believe OpenStack is vital to cloud strategies.

As Dawson puts it, we do see a lot of data that could validate the narrative that everything is going to public cloud. And it seems no matter which research firm’s report you look at, billions and billions of dollars are going toward public cloud.

Dawson spent some time taking some of the air out of the inflated expectations around migration to public cloud. "Everyone loves saying a huge number of enterprise workloads are migrating, magically, into the public cloud, every single second."

"Everybody likes to say: we have a cloud-first strategy, we are going to put everything in the cloud and that’s that. The problem is, it doesn’t even align to anything strategic underneath that," Dawson said. "The important thing is it is still really early and it’s so easy to forget this. It wasn’t even 10 years ago when we were still trying to figure out what IaaS versus PaaS versus BPaaS was, and what all the other ‘aaS-es’ were. It is still very, very early."

And while plenty of companies -- nearly 80 percent -- plan to move workloads to public cloud platforms in three years, those queried said only that they plan to have 10 percent or more of their workloads moved, according to McKinsey's 2017 global cloud cybersecurity research. At the end of 2017, Enterprise Strategy Group found that nearly 40 percent of enterprises that use the public cloud were pulling in one or more workloads.

The Reality for Most Enterprise Applications

In reality, most applications still run on traditional, virtualized servers. That’s what our customers told us when we surveyed them in September 2017. In our Red Hat Global Customer Tech Outlook 2018, we asked them what primary infrastructure they plan to use to deploy applications today. Of those surveyed, 59 percent said they were using virtualized servers today, and 43 percent planned to do so in the next 12-24 months. Only 9 percent said they were deploying applications on the public cloud at that time, while 13 percent planned to do so in the next 12-24 months. Respondents answered similarly regarding hybrid cloud (10 percent at that time and 13 percent in the next 12-24 months) and private cloud (8 percent at that time and 10 percent in the next 12-24 months).

There’s also evidence that points to opportunities for OpenStack. At the beginning of 2018, Research and Markets projected that the OpenStack service market would grow from $1.6 Billion in 2017 to nearly $5.7 billion by 2022. The report pointed to customers’ desires for rapid and easy deployments, wide community support and reducing vendor lock-in as drivers of the OpenStack service market. The report also found demand for greater control and security, features that Red Hat has sought to build into its OpenStack offering.

It’s true that OpenStack, like any infrastructure or platform, isn’t right for every workload. Dawson talked about areas where OpenStack really shines, such as ecommerce or applications with massive transactional requirements or constant API calls, as well as high performance computing (HPC) workloads. Also, not all organizations have the skills in-house to manage OpenStack, which is why we are seeing more managed services and hosted options for OpenStack.

Dawson’s key advice--and what she says she talks to customers about all the time--is aligning workloads with the right infrastructure based on a set of capabilities and criteria. Start with the application, it’s capabilities, dependencies, architecture, etc., and then develop a consistent way to evaluate that against your deployment options - be it bare metal, virtualization, private cloud, public cloud, multi-cloud, or hybrid.

It is a Hybrid Cloud World

What all these numbers indicate is that there isn’t one answer for organizations, and public cloud isn’t the only answer and won’t be the death of everything else. In fact, we expect most organizations to adopt a hybrid cloud strategy – one that uses a mix of both public and private cloud infrastructure, where workload portability across environments is achieved. As an example, more than 60 percent defined their strategy as hybrid in the Red Hat survey.  And according to an April 2018 Forrester Research report, 'Top 10 Facts Every Tech Leader Should Know About Hybrid Cloud,' 74% of North American and European enterprise infrastructure decision makers defined their cloud strategy as hybrid.Of course, not everyone has sorted it out. Our survey found that one-third were still determining their cloud strategy in 2017.

Reasons to adopt a hybrid cloud strategy vary. But for a number of organizations who participated in the Red Hat survey, they were doing so primarily to improve business agility. Other top reasons included reducing total cost of ownership, driving product or service innovation, and driving business growth.

Even as more organizations consider public cloud as part of their hybrid strategies, there can be challenges, such as higher than expected costs, performance and availability issues, and security considerations. But with the right partners, organizations can mitigate these challenges and capitalize on the benefits of each of the cloud environments: the scalability and flexibility needed for improved productivity, faster time to market, increased opportunities for innovation, and ultimately business growth.

Another reality is that OpenStack and public cloud are not mutually exclusive. A number of public cloud service providers and telecommunications providers around the world are using an OpenStack on-premises platform to power their public cloud services for their customers and partners. The same is true for many government organizations, who are leveraging the highly-scalable, flexible architecture of OpenStack to deliver public cloud services to government agencies and their constituencies.

In her presentation, Dawson delves a lot deeper into hybrid cloud, and also shares insights on how private cloud is a fundamental tool for digital transformation, what still needs to be done to enable customer success with OpenStack (such as making OpenStack easier to update, implement, and support) and overviews several businesses’ cloud implementations.

Check it out and if you want to learn more about this, please come by the Red Hat booth at OpenStack Summit in Berlin - November 13-15 booth #B1.

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