Many enterprises want to outsource the building of private clouds but fear lock-in to proprietary platforms.
An emerging solution to this dilemma is build-operate-transfer (BOT) contracts from open source providers.
The BOT model offloads the heavy lifting of do-it-yourself deployments while reassuring customers that they can assume operating control when they’re ready.
Providers offering these arrangements – including Canonical, Mirantis and Joyent (now owned by Samsung) – report keen interest in the BOT model.
However, they acknowledge that transfers are rare: once enterprises become accustomed to dedicated managed infrastructure, most prefer to pay the price so in-house staff can focus on higher-level services.
BOT contracts have historically been used for public works projects, in which a private company receives funding from a public sector organization to build and operate a facility (e.g., a refinery or airport) for a certain period of time, after which operation is transferred back to the funding entity.
Canonical was the first to apply the BOT concept to private clouds, offering BootStack (‘Boot’ stands for ‘build, operate and optionally transfer’) in late 2014.
The company found that few enterprises – especially those wanting to avoid public clouds for some applications – had the resources or expertise to build and operate OpenStack clouds on their own.
With BootStack, Canonical leverages its OpenStack distro and engineering expertise to build private clouds and operate them remotely as a managed service, while giving customers an 'out' if they want to assume control of the infrastructure later.
Mirantis started offering BOT contracts when it acquired TCP Cloud in 2016.
The company includes BOT as part of the value proposition of its Mirantis Cloud Platform, a managed service launched last year that incorporates Kubernetes for multi-cloud orchestration.
Joyent unveiled its BOT service in mid-2017 as part of its Private Regions offering, which devotes a dedicated, isolated portion of its public cloud to individual customers, with 100% open source and fully transferable infrastructure.
Joyent’s BOT service is called Triton Private Regions.
The BOT concept can be compelling because:
- Enterprises get a made-to-order private cloud that avoids lock-in to proprietary platforms.
- Providers receive steady revenue (license/subscription, managed services, hosting, support).
- Both enterprises and providers can focus on what they do best, while sharing the risk of cloud migration.
451 Research’s Private Cloud Price Index service found that labor costs are the biggest issue affecting OpenStack TCO: OpenStack engineers are significantly more difficult to find and they cost far more than VMware and Windows engineers.
BOT is an alternative that enables organizations to outsource the expertise-intensive work of designing and building open source private clouds with the ability to assume control of IT operations once the cloud is up and running.
Ingredients for Success
Based on the experiences of BOT providers and customers, here are some factors to consider:
- Eligible enterprises have data-intensive workloads, want to maintain single-tenant infrastructure, and have (or are willing to recruit/train) in-house engineering and cloud management teams.
- Candidates include companies that are less inclined to use public cloud but want the option of being able to develop and deploy applications quickly. Examples include telcos, companies with video/data-intensive applications, fintech firms, online retailers and enterprises with strict compliance demands.
- Builds can start small with enterprises migrating applications incrementally. For example, Canonical’s minimum configuration to start is 12 nodes in a single rack.
- The build-operate phase will likely take at least a year, with two or three years before transfer (if it occurs).
- The cost savings after transfer (i.e., the difference between the provider managing the infrastructure versus having a support contract only) ranges from 40% to 70%.
- Underlying hardware can reside in a datacenter or colocation facility owned by the enterprise, the provider or a third party.
- Provider training of enterprise IT operations personnel is crucial to enact a smooth transfer.
- Kubernetes support is table stakes, because providers need to ensure access to public cloud capabilities while offering container orchestration across public, private and physical infrastructure.
It’s clear why the BOT model can appeal to some enterprises: They can start small, tap into the development velocity of the open source community and ‘rent’ expertise from providers for setting up, scaling up, and training in-house staff to ultimately take over operations.
While only a minority of businesses take the ultimate step of transferring management in-house, those that do can realize considerable cost savings while avoiding lock-in to proprietary platforms.