451’s container orchestration usage survey – Notebook


As part of CoreOS’s conference this week, 451 put out a sponsored study on container orchestration. It’s been much cited and is free, so it’s worth taking a look. Here’s my highlights and notes:

  • Leadgen yourself to CoreOS get a copy of the report.
  • This report is really more of a “container orchestration usage” report than much about “hybrid cloud.”
  • Demographics:
    • “We surveyed 201 enterprise IT decision-makers in April and May 2017. This was not a survey of developers; rather, we received responses from those in C-level and director-level positions, including CISO, CTO, CIO, director of IT, IT Ops and DevOps, and VPs and managers of IT.”
    • All from the US
    • “All of our survey respondents came from organizations using application containers, and all were familiar with their organization’s use of containers.” – This survey, then, tells you what people who’re already using containers are doing, not what the entire market is thinking and planning on.
    • “A significant slice of the survey respondents represented large enterprises.”
  • Organizations are hoping to use containers for “[a] ‘leapfrog’ effect, whereby containers are viewed as a way to skip adoption of other technologies, was tested, and a majority of respondents think Kubernetes and other container management and orchestration software is sufficient to replace both private clouds and PaaS.”
  • Obviously I’m biased, being at Pivotal, but the question here is “to do what?” As we like to say around here, you’re going to end-up with a platform. People need a “platform” on-top of that raw IaaS, and as things like Icito show (not to mention Pivotal’s ongoing momentum), the lower levels aren’t cutting the mustard.
  • There’s an ongoing semantic argument about what “PaaS” means to be mindful of, as well: in contexts like these, the term is often taken to mean “that old stuff, before, like 2009.” At the very least, as with Gartner’s PaaS Magic Quadrant, the phrase often means means “only in the public cloud.” Again, the point is: if you’re developing and running software you need an application development, middleware, and services platform. Call it whatever you like, but make sure you have it. It’s highly likely that these “whatever you want to call ‘PaaS’ PaaSes” will run on-top of and with container orchestration layers, for example, as Cloud Foundry does and is doing.
  • That said, it’s not uncommon for me to encounter people in organizations who really do have a “just the containers, and maybe some kubernates” mind-set in the planning phase of their cloud-native stuff. Of course, they frequently end-up needing more.
  • Back to the survey: keeping in mind that all respondents were already using containers (or at least committed to doing so, I think), ~27% had “initial” production container use, ~25% of respondents had “broad” containers in production. So, if you were being happy-path, you’d say “over half of respondents have containers in production.”
  • In a broader survey (where, presumably, not every enterprise was already using containers), of 300+ enterprises, production container use was: 19% in initial production, 8% were in broad production implementation.
  • Nonetheless, 451 has been tracking steady, high growth in container usage for the past few years, putting the container market at $2.7B by 2020 and $1.1bn in 2017.
  • As the report says, it’s more interesting to see what benefits users actually find once they’re using the technology. Their original desires are often just puppy-love notions after actual usage:

  • Interesting note on lock-in: “Given that avoiding vendor lock-in is generally a priority for organizations, it might seem surprising that it was not ranked higher as an advantage since much of the container software used today is open source… However, our respondents for this study were users of containers, and may have assumed that the technology would be open source and, thus, lock-in less of a concern.” (There’s a whole separate report from Gartner on lock-in that I’ll take a look at, and, of course, some 140 character level analysis.)
  • On marketshare, rated by usage, not revenue:

  • On that note, it’s easy to misread the widely quoted finding of “[n]early three-quarters (71 percent) of respondents indicated they are using Kubernetes” as meaning only Kubernetes. Actually, people are using many of them at once. The report clarifies this: “The fact that almost 75% of organizations reported using Kubernetes while the same group also reported significant use of other container management and orchestration software is evidence of a mixed market.”

As one last piece of context, one of the more recent Gartner surveys for container usage puts usage at around 18%, with 4% of that being “significant production use”:


Of course, looks at more specialized slices of the market find higher usage.

This early in the container market, it’s good to pay close attention to surveys because the sample size will be small, selective, and most people will only have used containers for a short while. But, there’s good stuff in this survey, it’s definitely worth looking at and using.

Analysis of Mary Meeker’s Internet Trends – Notebook


Each year, Mary Meeker and team put together the Internet Trends report that draws together an ever growing collection of charts and analysis about the state of our Internet-driven world, from the latest companies to industry and economic impact. Over the years, the report has gone on to include analysis of markets like China and India. Being a production of the Kleiner Perkins Caufield & Byers venture capital firm, the focus is typically on new technologies and the corresponding business opportunities: you know, the stuff like “millennials like using their smartphones” and the proliferation of smartphones and Internet globally.These reports are good for more than just numbers-gawking, but can also give some quantitative analysis of new, technology innovations in various industries. The consumer and advertising space consumes much of this business analysis, but for example, in this year’s report, there’s an interesting analysis of health-care and transportation (bike sharing in China!). For enterprises out there, it may seem to over-index on startups and small companies, but that doesn’t detract from the value of the ideas when it comes to any organization looking to do some good, old-fashioned “digital transformation.”

Normally, I’d post my notebook things here, but the Pivotal blog overlords wanted to put this in on the Pivotal blog, so check it out there.

Telcos becoming cloud providers doesn’t seem to work

Since the late 2000’s, one of the cloud strategy theories was that existing telcos and network providers could become public cloud providers. Many, if not all have tried and/or trying. Thus far, it’s been a rocky road: few synergies seem to be sleeping on the ground, ready to roused up to go fight the giants, or, at least, carve out niche spaces. As summarized in a 451 report on CenturyLink:

That’s the idea that a connectivity provider should be better positioned to take advantage of cloud computing infrastructure because it controls the means of access to those resources, leading to a natural synergy. So far, none of the major carriers has managed to make that work, hampered by scale, traditional mindsets in network operations, and sales. Companies like AT&T, Verizon, Orange, BT and other global carriers got started on similar telco transformation efforts many years ago with varying degrees of success, and with major detours toward trying to out-Amazon Amazon in the IaaS space with network-focused cloud services. Instead vendors like Amazon Web Services and others have all but run away with the managed infrastructure and cloud markets, which are slated to reach a combined $100bn by 2020, according to 451 Research’s Market Monitor.

Furthermore, from another report on Verizon:

Verizon is not the first company of its kind to move away from infrastructure services in this way. Rackspace, at the time the world’s largest independently managed infrastructure and cloud provider, pivoted away from selling basic cloud infrastructure (and spinning off its low-cost web-hosting operations, Cloud Sites, to LiquidWeb), taking a more services-led approach. UK-based Colt Technology Services canceled its Managed Cloud offering (the go-to-market brand for its IT Services’ €80m revenue business) in 2016, selling it to German IT services company Getronics. Other IT vendors such as Hewlett Packard Enterprise (HPE) have chosen to keep out of the commodified public cloud service market, choosing instead to focus on hybrid and third-party services.

That said, there’s plenty of work – and spending – to be done to keep the tubes flowing and (eventually) costs optimized, e.g.:

[CenturyLink] has spent $700m on upgrades and improvements in its network, partly to serve NFV needs but also to address rates of failure in service delivery, repair times and other customer satisfaction areas.

And, for Verizon, there’s always money in the banana stand:

Focusing its efforts on managed networking services, managed security and professional services is a smart move for Verizon, given the lower costs, higher margins and double-digit growth rates of these sectors…. Managed security services and managed network services (in the ‘other’ category) – are expected to grow at 16.3% and 21.5% respectively during the same time.

We’ll see if one of the telco’s whacks it out, but the market window seems, if not painted shut, pretty firmly slid closed.

The eternal battle for OpenStack’s soul will conclude in three years. Again – My May Register column

“What types of clouds are running OpenStack?” OpenStack Survey, 2017.

My column at The Register this month looks at the state of OpenStack. As Matt Asay better headlined it “CIOs may not want to build private clouds, but they are, anyway.”

Check out the piece!

Canonical refocusing on IPO’ing, momentum in cloud-native – Highlights

Canonical Party

There’s a few stories out about Canonical, likely centered around some PR campaign that they’re seeking to IPO at some time, shifting the company around appropriately. Here’s some highlights from the recent spate of news around Canonical.

Testing the Red Hat Theory, competing for the cloud-native stack

Why care? Aside from Canonical just being interesting – they’ve been first and/or early to many cloud technologies and containers – there’d finally be another Red Hat if they were public.

Most of the open source thought-lords agree that “there can never be another Red Hat,” so, we’ll see if the Ubuntu folks can pull it off. Or, at the very least, how an pure open source company wangles it out otherwise.

That said, SUSE (part of HPE/Micro Focus) has built an interesting business around Linux, OpenStack, and related stuff. Ever since disentangling from Novell, SUSE has had impressive growth (usually something around 20 and 25% a year in revenue). All is which to, the Red Hat model actually is being used successfully by SUSE, which, arguably, just suffered from negative synergies (or, for those who don’t like big words, “shit the bed”) when it was owned by Novell.

As I’m perhaps too fond of contextualizing, it’s also good to remember that Red Hat is still “just” a $2.5bn company, by revenue. Revenue was $1.5bn in 2014, so, still, very impressive growth; but, that’s been a long, 24 year journey.

All these “Linux vendors,”like pretty much everyone else in the infrastructure software market, are battling for control over the new platform, that stack of cloud-y software that is defining “cloud-native,” using containers, and trying to enable the process/mindset/culture of DevOps. This is all in response to responding to enterprises’ growing desire to be more strategic with IT.

Canonical momentum

From Steven J. Vaughan-Nichols:

Shuttleworth said “in the last year, Ubuntu cloud growth had been 70 percent on the private cloud and 90 percent on the public cloud.” In particular, “Ubuntu has been gaining more customers on the big five public clouds.”

And:

Its OpenStack cloud division has been profitable, said Shuttleworth, since 2015

Al Sadowski has an extensive report on Canonical, mentioning:

[Canonical] now has more than 700 paying customers and sees a $1bn business for its OS, applications and IT operations software. Time will tell if this goal is realized.

And:

Canonical claims some 700 customers paying for its support services on top of Ubuntu and other offerings (double the 350 it had three years ago), and to have achieved more than $100m in bookings in its last financial year…. [Overall, it’s] not yet a profitable business (although its Ubuntu unit is). We estimate GAAP revenue of about $95m.

Strategy

On focusing the portfolio, shoring it up for better finances for an IPO:

we had to cut out those parts that couldn’t meet an investors’ needs. The immediate work is get all parts of the company profitable.

To that end, as Alexander J. Martin reports:

More than 80 workers at Ubuntu-maker Canonical are facing the chop as founder Mark Shuttleworth takes back the role of chief executive officer…. 31 or more staffers have already left the Linux distro biz ahead of Shuttleworth’s rise, with at least 26 others now on formal notice and uncertainty surrounding the remainder

Back to Al on the Job to Be done, building and supporting those new cloud-native platforms:

Rather than offering ways to support legacy applications, the company has placed bets on its Ubuntu operating system for cloud-native applications, OpenStack IaaS for infrastructure management, and Docker and Kubernetes container software.

And, it seems to be working:

Supporting public cloud providers has been a success story for Canonical – year-over-year revenue grew 91% in this area…. Per Canonical, 70% of the guest OS images on AWS and 80% of the Linux images on Microsoft Azure are Ubuntu. Its bare-metal offering, MaaS (Metal as a Service), is now used on 80,000 physical servers.

On OpenStack in particular:

Canonical claims to be building 4,000 OpenStack deployments a month at some 180 vendors…. It claims multiple seven-figure deals (through partners) for its BootStrap managed OpenStack-as-a-service offering, and that the average deal size for OpenStack is trending upward.

On IPO’ing

The Vaughan-Nichols piece outlines Shuttleworth’s IPO plans:

Still, there is “no timeline for the IPO.” First, Shuttleworth wants all parts of the slimmed down Canonical to be profitable. Then “we will take a round of investment.” After that, Canonical will go public.

However, Al’s report says:

It is not seeking additional funding at this time.

Probably both are true, and the answer as Shuttleworth says is “well, in a few years once we get the company to be profitable.

More

Software Defined Talk: Cloud Rules Everything Around Me – Red Hat, Moby, Docker CEO, and Halo Effect’ing The First Cloud Wars

There’s much news in the container world with DockerCon and Red Hat having had conferences, plus Docker gets a new CEO. We also do a hind-sight analysis of what wrong with the losers of the Cloud Wars. And, as always, recommendations from the three of us.

Be all civilized and modern by subscribing to the feed, or just download the MP3 directly if you prefer utter, complete control over your ear-holes.

On-premise IT holding steady around 65% of enterprise workloads – Highlights

barfing cloud.png

One of the more common questions I’ve had over the years is: “but, surely, everyone is just in the public cloud, right?” I remember having a non-productive debate with a room full of Forrester analysts back in about 2012 where they were going on and on about on-premise IT being dead. There was much talk about electricity outlets. To be fair, the analysts were somewhat split, but the public cloud folks were adamant. You can see this same sentiment from analysts (including, before around 2011, myself!) in things like how long it’s taken to write about private PaaS, e.g., the PaaS magic quadrant has only covered public PaaS since inception).

Along these lines, the Uptime Institute has some survey numbers out. Here’s some highlights:

Some 65% of enterprise workloads reside in enterprise owned and operated data centers—a number that has remained stable since 2014, the report found. Meanwhile, 22% of such workloads are deployed in colocation or multi-tenant data center providers, and 13% are deployed in the cloud, the survey found….

On-prem solutions remain dominant in the enterprise due to massive growth in business critical applications and data for digital transformation, Uptime Institute said
Public cloud workload penetration:
Some 95% of IT professionals said they had migrated critical applications and IT infrastructure to the cloud over the past year, according to another recent survey from SolarWinds.
Budgets:

That survey also found that nearly half of enterprises were still dedicating at least 70% of their yearly budget to traditional, on-premise applications, potentially pointing to growing demand for a hybrid infrastructure….

Nearly 75% of companies’ data center budgets increased or stayed consistent in 2017, compared to 2016, the survey found.

Metrics, KPIs, and what organizations are focusing on (uptime):

More than 90% of data center and IT professionals surveyed said they believe their corporate management is more concerned about outages now than they were a year ago. And while 90% of organizations conduct root cause analysis of an IT outage, only 60% said that they measure the cost of downtime as a business metric, the report found.

Demographics: “responses from more than 1,000 data center and IT professionals worldwide.”

Pretty much all Pivotal Cloud Foundry customers run “private cloud.” Many of them want to move to public cloud in a “multi-cloud” (I can’t make myself say “hybrid cloud”) fashion or mostly public cloud over the next 5 to ten years. That’s why we support all the popular public clouds. Most of them are doing plenty of things in public cloud now – though, not anywhere near “a whole lotta” – and there are of course, outliers.

This does bring up a nuanced but important point: I didn’t check out the types of workloads in the survey. I’d suspect that much of the on-premises workloads are packaged software. There’s no doubt plenty of custom written application run on-premises – even the majority of them per my experience with the Pivotal customer base. However, I’d still suspect that more custom written applications were running in the public cloud than other workloads. Just think of all the mobile apps and marketing apps out there.

Also, see some qualitative statements from CIO types.

So, the idea that it’s all public cloud in enterprise IT, thus far, is sort of like, you know: ¯_(ツ)_/¯

Rackspace positioning around cloud and OpenStack, from the CEO

Now that they don’t have to compete with AWS, they have an extra $300m floating around in the spreadsheets:

“Ultimately now it’s about how are we going to build a stronger company. If we don’t have to go spend $300 million a year in capital competing against Amazon, building computing storage and networking, where should we go put that? In things like managed cybersecurity and professional services,” said Rhodes.

On OpenStack, finding the product/market for for private cloud:

And what about OpenStack, the open-source cloud computing platform that Rackspace created with NASA?

“We thought the world wanted another alternative to public cloud,” said Rhodes. “What we are learning is the world doesn’t need another public cloud, so OpenStack is shifting form and going private cloud.”

Also, cameo from my former 451 colleague Carl Brooks.

Link

The Economist on Amazon – Highlights

  • Video: “In 2017 Amazon is expected to spend $4.5bn on television and film content, roughly twice what HBO will spend. But it has a big payoff.”
  • Prime momentum: “Mr Nowak reckons the company had 72m Prime members last year, up by 32% from 2015.”
  • Cloud: “Last year AWS’s revenue reached $12bn, up by more than 150% since 2014.”
  • Anti-trust, in the US: “If competitors fail to halt Amazon’s whirl of activities, antitrust enforcers might yet do so instead. This does not seem an imminent threat. American antitrust authorities mainly consider a company’s effect on consumers and pricing, not broader market power. By that standard, Amazon has brought big benefits.”

Are investors too optimistic about Amazon?