RackSpace Hosting and NASA made headlines by announcing an open source cloud software project earlier this week. Some observed that OpenStack could be the beginning of the end for open core business models for cloud infrastructure providers. IT decision makers are cautioned to ignore the predicted decline of open core, and instead, focus on selecting cloud technology that addresses business requirements.

Fully open source cloud software:
Launched by RackSpace Hosting and NASA, with the support of vendors such as Citrix, NTT Data and RightScale, the goal of OpenStack is to:

“…allow any organization to create and offer cloud computing capabilities using open source software running on standard hardware.”

Open source cloud software foundations are not new – Eucalyptus and Cloud.com are two vendors that offer open source products in the cloud arena. However, unlike Eucalyptus or Cloud.com which utilize an open core product strategy, OpenStack is billed as a completely open source project, without any advanced, enterprise or service provider relevant features only available in a paid commercial offering.

Rejecting open core:
In fact, when asked by RedMonk’s Michael Cote whether RackSpace would utilize an open core model for OpenStack, RackSpace’s Jonathan Bryce responded:

“No, we want a system that is truly open. And one of the reasons is cloud is all about scale and a lot of the open core software…they follow this open core model where you can run a basic version of the system and then when you want to do something that’s really heavy duty then you pay for the extra features that let you do that…So an open core model for a cloud system doesn’t make a whole lot of sense to me to have a product that is trimmed down and works on a small set of servers or on a small number of clients, whatever it may be and then you pay to get to the full scale, it just doesn’t seem to apply to cloud. So that’s not the model that we’re going after.”

A rejection of the open core model was also highlighted as a key driver for NASA contributing to OpenStack. NASA currently uses Eucalyptus to power its internal Cloud. However, according to an article by Cade Metz, Eucalyptus’ open core model was getting in the way of NASA’s usage pattern. Metz writes:

“NASA chief technology officer Chris Kemp tells The Reg that as his engineers attempted to contribute additional Eucalyptus code to improve its ability to scale, they were unable to do so because some of the platform’s code is open and some isn’t. Their attempted contributions conflicted with code that was only available in a partially closed version of platform maintained by Eucalyptus Systems Inc., the commercial outfit run by the project’s founders.”

Open core isn’t going away:
On the surface, it would seem that the open core business model could lose its popularity amongst open source cloud infrastructure providers. Bryce’s comment about the features of cloud infrastructure “at scale” being too much of a table stake to only be available in a commercial extension to an open core product does appear relevant.

Cloud.com quickly followed up the OpenStack announcement with a pledge to support OpenStack. As noted above, Cloud.com utilizes an open core business model, and is unlikely to reject the open core model as a result of OpenStack. Rather, it’s more likely that Cloud.com will utilize OpenStack components within Cloud.com’s commercial product offering.

Next, considering Eucalyptus, cloud pundit and ex-cloud computing strategist at Canonical, Simon Wardley, writes:

“This is also surprisingly good news for Eucalyptus if they move towards an entirely open approach. In such circumstance, the probability is we’re going to end up with a straight forward “clash of the titans” between Eucalyptus and OpenStack to become the Apache of Cloud Computing. Don’t be surprised if Eucalyptus even go so far as to adopt some of OpenStack’s work. Marten Mickos is an astute businessman and there are many ways they can turn this to their advantage.”

It would appear that OpenStack simply alters the landscape of features that are publicly available in an open source package versus features that are only available to paying customers. It should be noted that product support and maintenance is a feature, one that can be bundled with a for-fee product.

Select products based on business needs, not license alone:
It’s also interesting to note that very few enterprises are in NASA’s position with regards to size of IT investment and skills in-house. While NASA engineers were ready and willing to contribute new features into the Eucalyptus open source community, few companies have the skills or governance to consider allowing their developers to contribute to open source projects.  Summary trend number 7 from the 2010 Eclipse survey results highlighted this issue.

To suggest that NASA’s buying or IT decision making patterns represents much more than the top 1 percent of IT buyers would be a stretch.

The overwhelming majority of enterprises would rather pay a vendor to deliver, maintain, support and enhance their private cloud software infrastructure than place that burden on internal IT staff. Whether the enterprise is paying for a closed source commercial product, a commercial product based on an open core product, or a subscription to an open source product, the product selection decision will be made based on business requirements much broader than “is the product open source or not?”

Vendors are increasingly aware that customers select products that are both easy to adopt and easy to migrate away from. The opportunity to migrate away from a software platform relies on open standards and open data formats, and multiple implementations of these standards and formats, to a much higher degree than open source code alone. Supporting open standards and open data formats has little to do with the business model that a vendor selects to generate revenue from its efforts. Keep this in mind when deliberating between open source, open core and commercial private cloud software infrastructures.

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