Why OpenShift is Key to Red Hat’s Hybrid Cloud Strategy

Why OpenShift is Key to Red Hat’s Hybrid Cloud Strategy

Business value in the cloud is moving “up the stack”—starting with the operating system and virtual machines (VMs), and moving upwards into containers, middleware, and management stacks. This move bridges the cloud-software layers – adding business value for customers by making AppDev and DevOps easier and making management simpler – and increasing revenue growth for the vendor.

With that goal in mind, Red Hat enhanced new OpenShift container technology, making several announcements at its Red Hat Summit 2016 conference in San Francisco (June 27-June 30, 2016). These OpenShift capabilities are designed to make it easier to work with OpenStack, Docker and Kubernetes for customers that are building out hybrid clouds, linking enterprise datacenters with public clouds. These clouds include Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform and IBM SoftLayer, among others.


Timing Is Important

Red Hat’s broad support for Docker-formatted containers and Kubernetes is a pragmatic move, because of the tremendous rise of Docker deployments, and the increasing adoption of Kubernetes orchestration. This added support was a necessary decision for Red Hat, otherwise, its total available market (TAM) would have been limited.

Red Hat Enterprise Linux (RHEL) has a very large installed base, but as customers adopt DevOps and hybrid deployments it is critical that Red Hat ride that adoption wave by focusing on containers. Containers combine VMs together, efficiently delivering them to available data center resources, but doing so with less “overhead” in terms of processing cycles.

There are economic drivers for this strategy, too. Red Hat’s revenue from the application technology segment (AppDev, DevOps), generated three times the revenue in FY2016 as it did in FY2013, Red Hat told analysts at the Summit. That high growth rate makes applications development/deployment one of the fastest-growing segments for Red Hat.


OpenShift Strategy

The move to containers and micro-services is already underway at customer sites – and Red Hat is determined to capture a slice of that technology pie. It already has the lion’s share of paid licensed Linux distribution deployments. The strategy is to build on that strong foundation of RHEL shipments, and to provide a pre-tested containerized stack.

Red Hat posted many banners throughout the conference halls, saying: “Tried, Tested, Trusted.” This is clearly an appeal to IT values, including high availability, reliability and security – even as customers’ technology platforms are being transformed through the deployment of containers on clouds. Linux, open source and scale-out servers are a new foundation for enterprise workloads – but IT still wants to know that applications and data are secure and available.

Red Hat is making the case that adopting Red Hat technology fits with other layers in the cloud stack – presenting a pre-tested technology stack for enterprise workloads with company support for a range of deployment scenarios. As it supports customers’ hybrid clouds, Red Hat is working directly with public cloud providers, such as Amazon Web Services (AWS), Microsoft Azure and Google Cloud Platform (GCP). This optimizes data transfer between the clouds, and certifies that APIs linking the clouds work well.


OpenShift Announcements at Red Hat Summit

Red Hat OpenShift Container Platform (formerly named OpenShift Enterprise) is a web-scale container application platform based on Docker-format Linux containers, Kubernetes orchestration, and Red Hat Enterprise Linux 7 (RHEL 7).

News from the Red Hat Summit included:

  • Red Hat announced OpenShift Local, a free on-premises version of Red Hat’s OpenShift platform-as-a-service (PaaS) technology. This is analogous to Red Hat Enterprise Linux (RHEL) developer,  a no-fee option for developers who are working on enterprise-grade code during the proof-of-concept and early-adoption phases of their projects.
  • Red Hat will support converged management of server and storage resources via Red Hat Gluster Storage 3.X (future release). The converged approach will use a single control plane with Kubernetes in the Red Hat OpenShift Container Platform.
  • Red Hat began an “OpenShift Primed” designation for channel partners, to expand its ecosystem for OpenShift-based container tools. The designation means that the Red Hat software has been tested and certified to work well with the partner software. So far, more than 15 ISVs have this “OpenShift Primed” designation, including: 3scale; 6fusion; CloudBees; CloudMunch; Couchbase; Crunchy Data; Diamanti; Dynatrace; GitLab; Iron.io; NGINX; Nuage Networks; Pachyderm; Roambee; and Sysdig. Red Hat is working to expand this channel partner ecosystem by 2017.

Competition in the Container Space

But, as always in emerging and fast-growing markets, there are container alternatives, such as Cloud Foundry from Pivotal, CoreOS (e.g., Rocket) and others. In terms of an integrated-stack approach, Red Hat faces competition, especially from VMware and Microsoft. But that is quickly evolving toward a co-opetition strategy as Microsoft’s keynote talk at the Summit showed, focusing on Microsoft Azure and Microsoft SQL Server on Linux. Co-opetition is a dynamic in the marketplace in which vendors assure interoperability with competitors’ products and services, in recognition that their customers have products from multiple vendors. Co-opetition extends to formal partner relationships with vendors that compete in some, or many, of their mutual market spaces.


Key Takeaways

As we noted at the beginning of this blog, as major platform providers, Red Hat, VMware and Microsoft are continuing to move up the stack to feature PaaS and DevOps technology, above their original infrastructure platform.

Being able to build a scalable, pre-tested cloud stack is important to enterprise customers concerned about manageability, availability, reliability and security as they build out hybrid clouds. Now, with a number of container, orchestration and management options in the marketplace for enterprise-centric hybrid clouds, customer choice for enterprise cloud stacks will determine how, and when, Red Hat OpenShift will be added to the mix.

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