OpenStack: Digital Transformation for Service Providers

What is digital transformation?

Digital transformation is the ‘catch-all’ phrase used to describe the acceleration of IT development to meet the fundamental changes in how businesses operate and deliver value to their customers. While this is different in many industry verticals, companies share some common characteristics on this internal-culture changing journey.

Digital transformation means more innovative, development environments that embrace relatively new practices that are still being defined, as well as experimenting often as organizations become comfortable with failure. However, what does this mean for the service provider trying to navigate the competitive, cloud environment, and how can they take advantage of this trend?

SUSE has commissioned a 451 Research  pathfinder report entitled, “OpenStack – Enabler of Digital Transformation – How Service Providers Can Benefit.” This report highlights the advantages of using open-source platforms to build your next-generation software defined infrastructure. Key findings include:

• Open-source platforms can enable service providers to better support their customers’ digital transformation initiatives by taking advantage of openness, vendor-neutrality and leveraging the vast community of open source developers.
• Service providers with a history of vendor-independence and a“trusted business advisor” will benefit most from open source.
• Open-source cloud is gaining traction in all geographies where local data storage, language, application expertise and customization are key differentiators.

Competing with hyperscale companies

Most service providers struggle to compete with hyperscale cloud companies on price and available services. OpenStack is the most widely used open-source cloud platform to address these two issues head-on.

From an investment perspective, OpenStack does not require the expensive licensing cost of commercial proprietary cloud platforms. Due to widespread adoption, most hardware vendors already support OpenStack with drivers and software, which allows you to use your existing infrastructure. In addition, because you can switch distributions, or even “do-it-yourself,” it is very hard for an OpenStack distribution vendor to increase prices. OpenStack is built around automation, so once you’re established the operations cost can be greatly reduced. The 451 Research  report goes into detail on economic costs and benefits that you should consider when choosing your cloud platform.

Service providers can keep up or surpass the hyperscale cloud companies in innovation by leveraging the thousands of developers in the open source community. The latest advances in distributed databases, containers, Kubernetes automation/scaling, platform as a service (PaaS), artificial intelligence, machine learning, Internet-of-Things and 5G networks are all available on OpenStack—sometimes long before the proprietary cloud vendors can embrace these new technologies.

As your customers embrace hybrid environments, you can now offer them the same technology that they can implement in their own datacenters. Many companies choose to put their variable workloads in the cloud (e.g., development and emergency capacity), while keeping production on-site. Service offerings can now include the management of the company’s entire hybrid environment (both on-premise and in your data center) enabling customers to place their workloads wherever they make the most sense.

Recommendations for service providers

OpenStack can enable service providers to reduce cost while accelerating the creation of the innovative services that customers demand. In a recent Forrester study, “The Total Economic Impact of SUSE OpenStack Cloud,” the average customer adopting OpenStack showed a 380 percent ROI with payback in under six months. While there is an upfront learning curve, over time, you will be able to control your own destiny.

Most providers run OpenStack side-by-side with their existing architecture to become familiar with the technology. Initially, non-critical workloads are migrated over to take advantage of the cost savings. With time, as experience and familiarity grow, more and more workloads will move over to OpenStack. This is the same well-worn path taken by virtualization as well as most IT initiatives.

Consider offering a managed hybrid OpenStack environment to your customers enabling both on-premise and cloud-based capacity. Increase your catalog to include new open source technologies as they become production ready. OpenStack is the last cloud platform you will ever need. For more information, please visit our site dedicated to cloud service providers, at suse.com/csp.