At the OpenStack Enterprise Forum yesterday, theCUBE co-hosts John Furrier and Dave Vellante welcomed Raj Dutt SVP of Technology at Internap as a guest. The conversation was extremely lively as Dutt espoused his opinions on what OpenStack really means, and why VMware is a dead man walking.

The Enterprise is hot topic as businesses are trying to simplify both the processes and procedures of the Enterprise. How does OpenStack fit into that equation? What does OpenStack really mean in the Enterprise?

“To me it means, a realization that it’s 2014, open source is going win, open standards are going to win, VMware is a dinosaur, and you’re going to see a massive commoditization and OpenStack is the vehicle that the community, the global development community is going to be able to knock off billions of dollars off of market cap off VMware. I don’t mean to be provocative about it, but we really believe open source will win,” said Dutt.

Furrier then presents a question posed in our #OEForum Crowd Chat.

What happens when we commoditize apps, running on open commoditized hardware and open commoditized O… #oeforum via https://t.co/mEUvnjLzzw

— mark macauley (@mmacauley) January 30, 2014

Dutt responded, saying “You can commoditize your way all the way down the stack, from cloud orchestration to the hardware to data center to the network to the fiber in the ground to the way you route bits over the Internet, but at the end of the day companies can still differentiate on the value proposition of their application. I don’t think that is ever going to get commoditized. And as an application developer, you want to focus on making your app awesome without worrying about all of this auxiliary stuff.”

Open Season on VMware

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And then it becomes open season on VMware, with Furrier and Vellante both agreeing with Dutt’s stance. Dutt goes on to note that VMware was the first wave, but we’re to the second wave now. He believes that because VMware is fundamentally not open source, from a business perspective, it’s a huge disadvantage. So what is his prognosis of VMware, as he is obviously for open source?

“My prognosis is, while I have a lot of respect for VMware, I don’t see how they can overcome this huge tidal wave that is a global open source collaborative effort,” Dutt said. “It has happened again and again, whether you want to look at Linux, you want to look at Apache, the same story is going to play out here. I think they can reorient themselves to stay relevant. But at the end of the day they’ve been a huge enabler in server consolidation but they have done almost nothing as far as agility.”

And for those who believe open source and OpenStack will win out, that is the rallying cry. We’ve seen this story time and time again, and open source wins. The panel agreed that EMC spinning off Pivotal is a nice attempt, but it’s only one level removed from cloud orchestration, making it much more auxiliary.

On the top of the controversy, Vellante asked Dutt his opinion and the panel discussed a comment Randy Bias, the CEO of Cloudscaling, made during the #OEForum Crowd Chat.

@hpcloud OpenStack has no place in public cloud. 82% of all deployments are private. #oeforum via https://t.co/iFRNXokcZX

— Randy Bias (@randybias) January 29, 2014

Dutt acknowledged that Amazon is the big, 800 pound gorilla in the space, but OpenStack is the main answer that any new or growth player has to defend against Amazon. “OpenStack exists because it was a defensive move by Rackspace that they were going to have a difficult time catching up with Amazon and hiring people/talent,” said Dutt. But that is a sales side view only, what about the consumer side?

“I’ll be the first to admit right now, customers don’t care that they are using an OpenStack public cloud, but give it a few years and interoperability is going to start to matter, portability is going to start to matter, we’re still in early days,” Dutt stated. “Once that starts to happen, end users are going to start to demand OpenStack.”

Chris Kemp, Founder of Nebula and OpenStack, in his presentation at the OpenStack Enterprise Forum, even made the bold claim that Amazon will eventually support OpenStack. Furrier summed it up best: Enterprises want hyperscale, whoever can put hyperscale into a simplistic package with automation is going to win. At the end of the day servers are servers – price difference across all vendors is commoditizing. As public cloud providers, do you really care what server you’re using?

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Optimizing for the supply chain is a billion dollar industry. Dutt believes that OpenStack works because it is sharing institutional knowledge that has been gathered at the hardware level and at the data center build level — just like the software level. OpenStack is the realization that everyone is solving the same problems over and over again, and sharing data of what others are doing in server design and data center design. At scale, that means billions of dollars in the supply chain.

Long-term, renting from a service provider like Amazon is always more expensive than building your own solution through open source methods.

Before heading off, Vellante asked Dutt about his company Internap and whether a business can monetize the quality of service on the storage side, the elastic block storage analog? Dutt smiled and says they are starting to. Today, they are not as effective as they’d like to be in monetizing it, but in their next generation cloud they absolutely will. That next-gen cloud is currently in beta and will deploy in the first half of this year. The next gen cloud from Internap will have bill on metrics like iOPS, negatives per second, and allowing customer to build an exact profile of what they need.