OpenStack, the multi-vendor open source initiative founded by Red Hat and NASA, is growing by about 35 per cent annually and is expected to achieve revenues of $5.8bn (£4.7bn) by 2020.
A report by analyst firm 451 Research predicts solid growth for OpenStack as private cloud deployments gradually displace public cloud ones as a result of regulatory changes, easier implementation and a growing acceptance of the open source model.
So far, adoption has been predominantly by cloud service providers and for test and dev environments, but 451 Research expects to see more enterprises take it up as it matures.
Revenues for this year are expected to reach $1.825bn, up from $1.27bn in 2015 but placing OpenStack well behind VMware in the private cloud and AWS in the public cloud.
As the hybrid cloud model becomes more popular, so OpenStack is likely to be become increasingly attractive for mission-critical workloads. New use cases around emerging technologies are also likely to work in OpenStack's favour, 451 Research notes.
"While existing vendor relationships are often a key selection criterion for prospective OpenStack customers, there is also a growing desire to move beyond established vendors, particularly for newer initiatives around containers, microservices, mobility and IoT."
In particular, the growing use of open-source container technology such as Docker is mentioned in the report. While this is currently good for OpenStack the report notes that increasing use of containers may eventually eclipse the underlying platform.
In spite of growing acceptance, OpenStack is still a niche player, the report notes.
"OpenStack mind share continues to grow for enterprises interested in deploying cloud-native applications in greenfield private cloud environments and eliminating dependencies on proprietary software. However, its appeal is limited for legacy applications and for those enterprises already comfortable using hyperscale cloud providers such as AWS and Microsoft," it states.
Microsoft's Azure platform is one of the most widely used public cloud services and is seen as the biggest competition for OpenStack. Other major cloud platforms such as Amazon's AWS and Google Cloud Platform are more compatible with OpenStack.
In the private cloud, meanwhile, the main competition is VMware, although Microsoft is working on its own private cloud platform, Azure Stack.
"By far the largest and most notable software giant not yet offering public support is Microsoft," notes 451 Research.
"Microsoft has a competing public cloud, Azure, and a competing private cloud offer under development in Azure Stack, and its preferred hypervisor is Hyper-V to the OpenStack's community's default, KVM."
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