Piston Goes To Cisco, Blue Box to IBM As OpenStack Consolidation Accelerates

Next Story

Global Founders Capital Invests In Middle East Hotel Booking Startup Yamsafer

Cisco announced this morning it has purchased private cloud — and OpenStack — specialist Piston Cloud Computing. The acquisition comes on the heels of its Metacloud purchase last Fall, and the acquisition marks the latest OpenStack startup to get scooped up as the market consolidation continues.

Meanwhile IBM grabbed the OpenStack private-cloud service Blue Box, another OpenStack player, as the big companies’ fight for OpenStack dominance continues unabated.

OpenStack is clearly maturing and part of that process involves the startup dominoes starting to fall fast and furiously as big companies like Oracle, IBM, HP, EMC and Cisco begin to see the value of these companies as they attempt to capture a piece of the growing OpenStack market. When assessing the build versus buy equation and the difficulty finding OpenStack engineering talent, buying often makes the most sense.

It gives these companies like Cisco and IBM the talent they desire and some nice intellectual property to go with it.

OpenStack is a six-year-old open source computing platform, originally conceived as a check to the growing power of Amazon cloud computing services. It provides an open way to create public and private clouds (though it’s currently mostly used for private ones) and includes all of the services a modern cloud computing platform would require, with core features like compute, storage and networking, as well as numerous ways to easily run popular software packages like Hadoop and technologies like containers on top of it.

As it has grown in popularity in recent years, it has caught the attention of the technology giants, as they as they jockey for position and try to grab a piece of the OpenStack pie and clients who would need to run complex private clouds. Just last month for instance, Oracle snagged 40 former Nebula employees from the shuttered startup to beef up its OpenStack effort. EMC scooped up CloudScaling last Fall as another example.

Interestingly enough, Piston company co-founder and original CTO Joshua McKenty, who was one of the early proponents of OpenStack, recently said the project had “lost its heart” and he wouldn’t be attending OpenStack’s bi-annual Summits any longer. The reason he felt this way was the corporatization of the project, which the purchase of the company he helped found clearly illustrates.

Piston’s main product is CloudOS, which is an operating system for OpenStack. Its primary benefit is that it provides a way to manage server clusters as a single pool of resources, not unlike Mesosphere.

Blue Box is a managed cloud provider built on OpenStack and IBM sees it as a way to accelerate its hybrid cloud strategy, an area it believes it can dominate. The Blue Box purchase will help customers deploy data and applications across different cloud environments.

As the OpenStack project has grown, a huge ecosystem of startups has built up around it. Unfortunately for these young companies, the ecosystem itself hasn’t kept up the pace, and adoption has been slower than hoped.

Even though there were some great examples from Comcast and Walmart being paraded at the most recent OpenStack Summit in Vancouver, there are companies still dabbling, experimenting or hanging back. OpenStack is a great idea, that’s been difficult to implement.

For startups, the ecosystem simply isn’t growing fast enough, so some consolidation is inevitable. The ones that can wait out this current fallow period are those that only look at OpenStack as a secondary source of income (think storage and networking companies that already have non-OpenStack products and customers). Others who have bet the house on OpenStack, including the likes of Mirantis, are now at risk of being acquired before the market — and their potential — fully matures.

The big companies like Cisco and IBM can take advantage of the slow pace of adoption to buy these companies and build their OpenStack chops in the process. The ultimate hope is that companies will be willing to take a chance with OpenStack with big names they know, rather than small startups.

Featured Image: Shutterstock