Inside Advanced Scale Challenges|Friday, November 24, 2017
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HPE, Rackspace Embrace Metered Private Cloud 

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Is "pay-as-you-go" the way to go for private cloud vendors? Partners Hewlett Packard Enterprise and Rackspace are betting it is, announcing this week they will offer an OpenStack private cloud service running on "pay-per-use" infrastructure.

Seeking to differentiate their services from the dizzying number of cloud providers, the partners cite industry forecasts suggesting that pay-as-you-go consumption models will account for half of on- and off-premises IT and datacenter spending over the next year. Hence, the model provides a twist on the growing enterprise popularity of multi-cloud strategies.

"We fully expect this simple pay-per-use technology model to change the way enterprises make technology decisions," Antonio Neri, HPE's president, noted in a statement announcing the private cloud partnership on Monday (Nov. 13).

The partners predicted the consumption model would remove barriers to private cloud adoption, particularly OpenStack deployments. Scott Crenshaw, Rackspace's executive vice president of private cloud, added that it plans to extend the model to the rest of its private cloud offerings, including Microsoft Azure Stack (NASDAQ: MSFT) and VMware (NYSE: VMW).

Proponents argue that billing customers only for the private cloud services they use eliminates the cost of unused fixed capacity while simultaneously handling unforeseen bursts in cloud workloads and other traffic spikes.

The partnership adopts the consumption model used by cloud giants like Amazon Web Services (NASDAQ: AMZN) and Google (NASDAQ: GOOGL) that have eroded HPE's (NYSE: HPE) server and storage revenues. Earlier this year, HPE acquired Cloud Cruiser, a provider of cloud consumption analytics software designed to help manage private, public and hybrid cloud usage and spending.

The acquisition was intended to bolster HPE's "flexible capacity" offering that allows customers "to manage IT infrastructure in their own datacenter but pay for it as a service," according to a company blog post.

The deal for Cloud Cruiser gave HPE the ability to meter and bill for private cloud usage.

HPE and Rackspace also stressed the advantages of their single-tenant model that would help eliminate "noisy neighbors" issues associated with hosted multi-tenant approaches. The managed service also is touted as tightening data security and governance.

Market analysts note that Rackspace has gradually moved away from its OpenStack public cloud infrastructure offering to focus on private cloud infrastructure and managed cloud services. In its latest "Magic Quadrant" assessment of cloud infrastructure services vendors, Gartner (NYSE: IT) noted that Rackspace's cloud infrastructure was "technology-neutral" with platforms based on Microsoft Stack, VMware and, now, HPE infrastructure.

While Gartner had few quibbles with Rackspace's private cloud offerings, it noted that the OpenStack pioneer's 2016 sale to a private equity investor makes "it more difficult for customers to assess vendor-related risks."

HPE and Rackspace said their OpenStack private cloud with pay- per-use infrastructure would be generally available in all regions on Nov. 28. Additional Rackspace private clouds running on VMware and Microsoft Azure Stack are scheduled for deployment in 2018.

About the author: George Leopold

George Leopold has written about science and technology for more than 25 years, focusing on electronics and aerospace technology. He previously served as Executive Editor for Electronic Engineering Times.

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