How do you eat an elephant? In small bytes. That old saying applies to Canonical’s emerging Ubuntu cloud strategy. Instead of attacking the entire hosting industry and attacking big rivals like Red Hat and Microsoft head-on, Canonical is quietly pursuing 10 hosting partners to pilot Ubuntu Enterprise Cloud. Here are the details from HostingCon in Austin, Texas.
First up, The Planet — a major hosting provider — is using Ubuntu and the KVM (Kernel-based Virtual Machine) hypervisor for its cloud and virtualization strategy. With the release of Ubuntu 10.04 in April 2010, Canonical’s goal was “to identify up to 10 partners to do [cloud] pilots with us,” said Nick Barcet, a cloud solutions lead at Canonical. “Three [partners] are building pilot solutions now” with more coming online by the end of 2010, he added, with production deployments expected in 2011.
Most of the pilots will involve North American hosting providers, but Canonical has received inbound inquiries from potential cloud hosting partners in Europe and at least one pilot could involve Japan, Barcet added.
In order to sharpen Canonical’s hosting partner focus, Robin Barley-Waegener has shifted from her channel sales management position to a hosting-centric partner position, Barcet said. Both Barcet and Barley-Waegener are attending HostingCon, a major managed hosting conference this week in Austin, Texas. Apparently, The VAR Guy has infiltrated the event…
Challenges and Opportunities
Even though cloud opportunities are fairly new, Canonical faces entrenched competition in the hosting market — where operating systems like CentOS and Red Hat Enterprise Linux (RHEL) are dominant.
Moreover, Red Hat is seeking to create a powerful one-two combo with RHEL and Red Hat Enterprise Virtualization (RHEV, based on KVM). And Microsoft is expanding its own public cloud efforts (Windows Azure and BPOS) to include a so-called Azure Appliance for private clouds.
Still, Canonical has some opportunities in the hosting market. At HostingCon, several hosting companies told The VAR Guy that Red Hat’s service provider pricing remains too expensive for many customer deployments, potentially creating a void for Canonical and Ubuntu Enterprise Linux to fill.
Moreover, Canonical’s Barcet believes hosting companies can build open, standards-based alternatives to Amazon Web Services. The reason: Ubuntu Enterprise Cloud leverages Eucalyptus — an open source cloud system that’s compatible with Amazon APIs.
“Amazon’s service level agreement doesn’t meet everyone’s need,” noted Barcet. “Hosting companies can step in to offer Ubuntu Enterprise Cloud and Amazon-compatible offerings with different SLAs and different pricing models.”
Still, it’s early in the Ubuntu Enterprise Cloud game. So far, Barcet is only willing to disclose The Planet as an initial partner. But The VAR Guy is digging to see which 10 hosting companies intend to pilot Ubuntu Enterprise Cloud.
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If Red Hat’s service pricing is too expensive… that doesn’t necessarily mean that Canonical can be _cheaper_ and still be profitable. Landscape hasn’t been cheaper pricing-wise historically than Red Hat’s support agreements.
Is Canonical once again just putting gratis Ubuntu deployments out there as a lossleader to grab mindshare? What’s the _business_ plan here? What is Canonical’s value for money proposition for its services aimed at hosting companies? What exactly is Canonical trying to sale these hosting partners? Landscape support? Canonical doesn’t have a strong KVM engineering team to form the basis of a SLA response or technical consulting relationship with hosting providers rolling out KVM solutions..unlike Red Hat.
If hosting partners are looking at Ubuntu as a gratis platform sans any support contract then sure that is as cheap as a CentOS installation..but that’s not a business model. Will Canonical succeed in displacing some gratis CentOS deployments with gratis Ubuntu? Most assuredly. Will Canonical score revenue generating wins with hosting entities willing to lay down cold cash for services rendered? Not so clear.
How is Canonical planning to persuade these people to become _customers_ ? Canonical needs to be careful here. Hosting companies _compete_ with Canonical for management/service dollars. The value add that a hosting company like The Planet puts into their products is management and service. Where does Canonical’s own service and management offerings fit in if The planet is providing equivalent services to their customers?
I have to agree some with the comment above. This play looks like what my grandpa used to call “a sucker’s bet”.
I bet there are many hosting/cloud provider types who will encourage them, and throw tiny bits of money at them to keep them encouraged.
Similar in some ways to chasing the “Windows knock-off for cheaper plan” which Canonical has done for several years. Where end customers say “we don’t want to pay for Windows, give us good enough for $5/copy”, and large companies say “if you get us something for free, or $1, we will sell millions”. But generally it has not happened, and in most cases it is just used by customers and OEMs for negotiating leverage with Microsoft. Add in their surge to go after the fading Netbook market for that matter, and there is another example of this same type of situation.
Sucker’s bet, money-hole, whatever you want to call it, but I am personally tired of hearing how they are going to do these grand free plans, and then make money on the backend at “some point”.
Bill,
The “some point” never comes partly because the technical laypress don’t want to ask Canonical any performance follow up questions a year after the initial ra-ra press releases.
We’ve seen this sort of pilot stuff before. Wikimedia switches their server infrastructure over to Ubuntu with the gifted at-no-charge technical assistance of Canonical a couple of years ago. Did Wikimedia ever lay down any cash for support or management services with Canonical? I’m not aware of it.
Another pilot historic example. The Fresh government rolls out some Ubuntu desktops in police stations..again with gifted at-no-charge support from Canonical.. with a hint at a plan to contract with someone for support and management services after the pilot program…the obvious candidate being Canonical. They did the migration complete unfunded. The chalked up cost savings simply because they were not buying any support or training for Ubuntu at any level during the migration process. So what happened with the long term plans to find funding for support? Did the French government actually provide a budget for the migration that includes any funding for training or consulting or management and if so is any of that money going to Canonical?
Cloud hosting companies are exactly the companies that Canonical is not going to make any money off of. They are going to be even tighter with support dollars than OEM partners are simply because they have expertise in-house to deal with software management issues. These companies are going to leverage ubuntu as a no-cost platform and put their own value-add services front and center in place of Canonical. Once the pilot hosters are comfortable with UEC they are more likely to support Eucalyptus Systems directly to see the underlying codebase advanced than to pay Canonical for technical expertise it does not have.
-jef