PayPal To Replace VMware With OpenStack

Julie188 writes "This should make VMware nervous. PayPal and eBay are yanking VMware software from some 80,000 servers and replacing it with OpenStack. Initially, PayPal is replacing VMware on about 10,000 computer servers. Those servers will go live this summer."

Comments

Lesson: Licensing costs suck

[Anonymous Coward]

VMware is not in a monopoly position anymore and can no longer dictate prices to people who have free alternatives.

Re:Lesson: Licensing costs suck

[fuzzyfuzzyfungus]

VMware is not in a monopoly position anymore and can no longer dictate prices to people who have free alternatives.

Vmware is arguably facing a serious structural squeeze: Outside of a few neat-but-not-necessarily-all-that-widely-used features, virtualization technology is being commodified pretty aggressively. Vmware is still arguably the easiest to use; but that doesn't help them much with customers who are running enough servers that having a few gurus in house is cheaper than paying the license fees. Even worse, at the same time that team FOSS is chipping away at the large-scale market, Microsoft is essentially offering 'Buy Windows Server, get Hyper-V for free*', which is a pretty attractive offer for the outfits who aren't going to go for Xen or KVM; but need to run Windows Server stuff anyway, and probably have some MS-comfortable guys in the shop.

If it were just a squeeze from one direction or the other, I'd be less pessimistic; but forces are converging on them from both sides. Unless Vmware discounts their licenses to nearly free, their high volume customers aren't likely to stick with them, and having strong enterprise support and brand recognition isn't exactly going to save them from Microsoft(who has the same thing) on the low-volume smaller shop end. Blood Bath.

Re:Lesson: Licensing costs suck

[MightyMartian]

For now. But I've found hyper-v is at best an adequate product and VMware is obscenely priced, so in the end enterprise software houses will adapt as they did to a landscape that shifted away from closed source *nix solutions like SCO and Solaris. Sure, they may only support Redhat as far as distros go, but the fact is that VMware and Microsoft's shoddy little product hardly rate as the only virtualization solutions out there.

Re:Lesson: Licensing costs suck

[Jeremiah Cornelius]

This story from Gigaom is a little more tempered than the article on Businessinsider. It quotes the Paypal director, saying they will continue to use VMware - if you read right through to the end of it.

http://gigaom.com/2013/03/25/mirantis-open-sources-its-openstack-cloud-management-tools/

This, in any case, is not a "tipping-point" indicator.

With or without Mirantis or Fuel, Openstack is a tool kit for building your own CloudOS. Unless you can make a business based on the internal IP generated, there's no win here for most enterprise shops.

Amazon did this sucessfully - getting value from reselling access to raw infrastructure, based on development created for internal needs.

Yahoo failed at this, after more than a decade optimising their own OS layer for internet scale-out. They would have been better served to eliminate their OS engineering unit, buying common OTS Linux/Windows.

PayPal are somewhere between these poles. Having been on their own linux-based, scale-out physical architecture for more than a decade, they are well-positioned to derive value from Openstack. If you were Williams-Sonoma or Chevron? They do not want or need to become an OS developer/integrator.

Re:Lesson: Licensing costs suck

[sjames]

No knocks from me on VMWare itself. It's biggest failing has always been it's licensing.

I think you may be over-valuing them though. We had VMs on mainframes in the '70s (VM/370). VMWare brought full virtualization to PC class hardware (as opposed to the lesser capabilities of DOSBox and company). In part, it was simply a matter of waiting until x86 hardware was sufficiently capable. I have little doubt that we would have VMs today with or without them.

PayPal Uses OpenStack

[grusapa]

http://www.openstack.org/user-stories/paypal/

Good Riddens

[BitZtream]

Theres something wrong with VMware that makes it think it can charge more for virtualization software than the hardware it is replacing. They need their asses handed to them for a few years to put them back in their place.

It's no biggie. You have to understand the big pic

[Stu101]

Hi

Speaking as someone who spends 100% of their working week in VMware it's no biggie. A (very) small group of us look after a stack just as big as that.

With MS entreprise agreements that mean you now have to a seperate for each socket in the cluster (ie when DRS moves the guest to another cluster node or you get a host failure and HA kicks in) it costs an awful lot and also makes Hyper V looks more enticing to the bean counters as the Enterprise comes with all the Hyper V management tools..

VMware realise they cannot compete on cost and they have said as much. No matter what you say about Hyper V I have seen some nasty failures that just wouldn't happen in VMware (and lets not forget host failures can mean loosing 30 guests at one time (Lets not go into allowable failure scenarios..)

I have seen a Hyper V guest mentally shit itself and cause the host to fail in such a manner that the failed machines didn't restart. So rather than have a restart on another cluster member a guest was able to take out a host. Just wouldn't happen with VMware and it's highly advanced Virtual Machine Manager. VMware also has awesome other features including shared memory paging etc etc.

Big business craves stability over saving a few hundred bucks per machine. However VMware are coming up with interesting new stuff and more interestingly the more advanced features are flowing down into more basic editions.

Just my 2 cents.

They can't even beat a book seller

[jbmartin6]

I thought the comment from this was pretty telling:

VMware COO Carl Eschenbach jumped on the Amazon theme, saying, "I look at this audience, and I look at VMware and the brand reputation we have in the enterprise, and I find it really hard to believe that we cannot collectively beat a company that sells books

VMWare is completely lost if that is how they view their marketplace.

Re:They can't even beat a book seller

[h4rr4r]

This is what happens when an MBA type person runs a tech company. He thinks more about brand and reputation than being the best in the market. He thinks marketing and commercials can replace good products that offer great value.

Re:VMware for free

[mysidia]

No live migration, no centralized management, none of the features the competitors offer for free.

Live migration is not free, but it is cheap -- less than $1000 bucks per server for a standard license. Central management of Hyper-V requires systemcenter virtual machine manager which is not free.

At sufficient scale, the VMware licensing costs are almost non-consequential. For purchasing VMware to be the better choice, it is not necessary that the license have a lower cost. The ROI needs to be higher. As long as VMware can offer a higher ROI, through functionality, and advanced features, or through greater consolidation ratios (lower cost per virtualized application in a cloud; more workloads per server, less electricity or hardware cost per workload on average), then the organizations who can justify the use of those features will save more money by buying VMware's products and have lower costs than if they used a competitor's product with a lower per-unit license charge.

Competitors' products don't offer free comparable enterprise-quality equivalents to Transparent page sharing (TPS)/Transparent memory compression (memory overcommit), the Cisco Nexus1000V distributed virtual switch, CPU Memory HotPlugging, Virtual Serial Port concentrator, Host Profiles, Resource Pools/Distributed Resource Management, Distributed Power Management, Storage I/O Control, Vmware APIs for Array Integration, vShield Endpoint, vShield App, vShield Edge, vCloud Network and Security (VXLAN), etc.

The competitors' total available functionality is more limited.