Ninefold: Going Head to Head with AWS and Using Opensource is Risky in Cloud Land

Today Ninefold (an Australian based IaaS and PaaS) provider announced that they where closing their doors an would be migrating their clients to their parent companies (Macquarie Telecom) cloud services. And while this hasn’t come as a surprise to me…having closely watched Ninefold from it’s beta days through to it’s shutdown it does highlight a couple of key points about the current state of play in the public cloud in Australia and also around the world.

As a disclaimer…this post and the view points given are totally my own and I don’t pretend to understand the specific business decisions as to why Ninefold decided to shut up doors apart from what was written in the press today around operational expenditure challenges of upgrading the existing platform.

“After an evaluation of the underlying technical platform, much consideration and deep reflection, we have decided not to embark on this journey,” the company said on Monday.

However, rather than have people simply assume that the IaaS/Cloud game is too hard given the dominance of AWS, Azure and Google I thought i’d write down some thoughts on why choosing the right underlying platform is key to any Clouds success…especially when looking to compete with the big players.

Platform Reliability:

Ninefold had some significant outages in their early days…and when I say significant, I mean significant…we are talking days to weeks where customers couldn’t interact or power on VM instances to go along with other outages all of which I was led to believe due to their adoption of CloudStack and Xen Server as their hypervisor. At the time I was investigating a number of Cloud Management Platforms and CloudStack (at the time) had some horror bugs which ruled out any plans to go with that platform at the time…I remember thinking how much prettier the interface was compared to the just released vCloud Director but the list of show stopping bugs at the time was enough to put me off proceeding.

Platform Choice:

CloudStack was eventually bought by Citrix and then given to the Apache Foundation where is currently resides but for Ninefold the damage to their initial reputation as a IaaS provider for mine did not survive these initial outages and throughout it’s history attempted to transform firstly into a Ruby On Rails platform and more recently looked to jump on the containers bandwagon as well as trying to specialize in Storage as a Service.

This to me highlights a fairly well known belief in the industry that going Opensource may be cheap in the short term but is going to come back and bite you in some form later down the track. The fact that the statement on their closure was mainly focused around the apparent cost of upgrading their platform (assuming a move to Openstack or some other *stack based CMP) highlights the fact that going with more supported stacks such as VMware ESXi with vCloud Director or even Microsoft Hyper-V with Azure is a safer bet long term as their are more direct upgrade paths version to version and there is also official support when upgrading.

Competing against AWS Head On:

http://www.itnews.com.au/news/sydney-based-cloud-provides-price-challenge-247576

Macquarie Telecom subsidiary Ninefold launches next week, promising a Sydney-based public cloud computing service with an interface as seamless as those of Amazon’s EC2 or Microsoft’s Azure.

Ninefold from the early days touted themselves as the Public Cloud alternative and their initial play was to attract Linux based workloads to their platform and offer very very cheap pricing when compared to the other IaaS providers at the time…they where also local in Australia before the likes of AWS and Azure set up shop locally.

I’ve talked previously about what Cloud Service Providers should be offering when it comes to competing against the big public cloud players…offering a similar but smaller slice of the services offered targeting their bread and butter will not work long term. Cloud Providers need to add value to attract a different kind of client base to that of AWS and Azure…there is a large pie out there to be had and I don’t believe we will be in a total duopoly situation for Cloud services short to medium term but Cloud Providers need to stop focusing on price, so much as quality of their products and services.

Final Thoughts:

Ninefold obviously believed that they couldn’t compete on the value of their existing product set and due to their initial choice of platform felt that upgrading to one that did allow some differentiation in the marketplace compared to the big public cloud players was not a viable option moving forward…hence why their existing clients will be absorbed into a platform that does run a best of breed stack and one that doesn’t try to complete head to head with AWS…at least from the outside.

“Those tier two ISPs and managed services outfits standing up wannabe AWS clones cobbled together out of bits of Xen, OpenStack and cable ties?”
Roadkill.
As the industry matures, smaller local players will find they can’t make it pay and go away. The survivors will move into roles as resellers and managed services providers who make public cloud easier for those who don’t like to get hands on with the big boys. This is happening already. By 2015 we’ll see exits from the cloud caper.“

http://www.zdnet.com/article/ninefold-to-shut-operations/

http://www.itnews.com.au/news/ninefold-to-shut-down-411312?utm_source=twitter&utm_medium=social&utm_campaign=itnews_autopost

http://www.crn.com.au/News/411313,macquarie-telecoms-ninefold-closing-down.aspx?utm_source=twitter&utm_medium=social&utm_campaign=crn_autopost

http://www.theregister.co.uk/2013/12/19/australias_new_year_tech_headlines_for_2015/