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Telecom Clouds Drift Toward OpenStack

CHICAGO -- Cloud Connect -- Now that VMware Inc. (NYSE: VMW) has joined OpenStack, the open-source cloud management platform is expected to gain momentum as well among major telecom players operating their cloud subsidiaries, says the CTO of Rackspace , the company that helped develop OpenStack.

John Engates was here to encourage enterprise CIOs to become part of the OpenStack movement in his Tuesday keynote, but in an interview, he also stressed the reasons why big telecom needs to get adopt the open-source approach to cloud.

"I think now that VMware is part of OpenStack, that changes the rules," Engates says. VMware has been the vendor of choice for companies such as Verizon Terremark , a unit of Verizon Enterprise Solutions , and its embrace of OpenStack signals changes ahead. (See VMware Looks Into the Network.)

Already teams of developers from VMware and OpenStack have staged a hackathon to work out how Cloud Foundry, the open-platform initiative started by VMware, will work on top of OpenStack, Engates points out.

A handful of large carriers -- NTT Communications Corp. (NYSE: NTT), KT Corp. , AT&T Inc. (NYSE: T) and Deutsche Telekom AG (NYSE: DT) -- have joined OpenStack but more are expected.

As enterprises push for more open APIs into cloud platforms, both to ease the complexity of moving to the cloud and to prevent the dreaded vendor "lock-in," the pressure will mount on cloud operators of all kinds to embrace OpenStack, Engates maintains.

Another major strength of OpenStack is its ability to more easily enable hybrid cloud platforms -- the combination of public and cloud operations that appeal to larger enterprises looking to combine the savings of commodity public clouds for some operations with the security and control of private clouds for other apps.

Engates adds that U.S. operators are also quietly placing internal bets on open-source cloud computing, saying Rackspace counts the marketing organization of one major U.S. telecom player among its customers -- not surprisingly, he wouldn't name the company.

While Rackspace continues to promote OpenStack and the open-source approach to cloud, its own cloud services business represents a classic case of "co-ompetion" with larger telecom cloud players. Rackspace buys bandwidth from the same telecom operators for which it is both a competitor and a supplier.

In the SMB market, which is increasingly a focus for telecom players of all types getting into cloud services, Rackspace will compete vigorously, promising a level of service and support that Engates believes telecom operators can't match.

"We don't see software or technology as the way to hold onto customers," he says. "And while telecom players are trying to bundle a lot of things together, we tell almost a completely different story. We have fanatical support. We serve a subset of customers who are willing to pay a little bit more for a different outcome and a much higher level of service and support."

— Carol Wilson, Chief Editor, Events, Light Reading

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