Citrix is turning Cloudstack over to the Apache Software Foundation and aligning closely with Amazon Web Services in a move that will force the very green OpenStack movement to take another look at its governance model.

The move by Citrix is a coup of sorts for AWS. The companies have no official partnership but Citrix will make Cloudstack fully compatible. Citrix move will force the entire market to consider if it should open its cloud infrasrtucture to the Seattle book purveryor turned server rental titan. That means Microsoft, VMware and any other service provider will need to consider this if they want to be a player with AWS in a market worth billions if not trillions in revenues.

The irony is rich, isn’t it?  Enterprise and public cloud services providers have obsessed over the past two years about differentiating from AWS. And now they may have no choice but to align with them.

Citrix acquired Cloud.com last year and changed it into what is now Cloudstack. It makes grandiose claims about its deployments – tens of thousands of servers, billions in revenues from the customers that have deployed it. But its future is with AWS. It will be 100% complaint with the AWS infrastructure.

Citrix will remain somewhat active in OpenStack with support for virtualization and networking. But Project Olympus is dead. That was Citrix cloud infrastructure based on OpenStack that it announced last Spring.

Krishnan Subramanian is the founder of the newly launched Rishidot Research and a recognized expert in the still nascent cloud computing movement. He says the move adds momentum to standardizing around AWS. He believes the market is too young for standards, though, and therefore creates an imbalance.

The move also puts OpenStack on the defensive. It could force OpenStack to change its governance model and make the foundation more equitable

Rackspace launched OpenStack with NASA in 2010. By contributing its Swift storage technology, Rackspace had considerable influence.  But without a foundation,  there were soon questions about it being impartial. Rick Clark was one of the founding members and served as chief architect for OpenStack. He resigned after the OpenStack Governance model underwent changes without community participation.

In recent months, OpenStack has adopted a governance structure that critics say gives too much influence to the top tier contributors, leaving the smaller companies feeling like they lack a voice.

There have been technical concerns, too. To date, there have been no major OpenStack deployments. The clock is ticking.

Services Angle

This news affects every services provider on the planet. Citrix is unquestionably the underdog. As Randy Bias points out, Citrix spent $500 million on its investments in XenSource four years back and Cloud. com this past year cost it about $200 million. In the meantime, competitor Eucalyptus Systems has shown why it is winning. It rebuilt its infrastructure for high availability and fortified its partnership with AWS.  Citrix had to do something. Aligning with AWS made the most sense.  And it could be the difference if the OpenStack movement does not correct its governance issues.

The implications are even more significant for the outsiders looking in. OpenStack does not have an AWS API and so it has to depend on its developer community to build out a federated cloud. Neither VMware nor Microsoft have AWS APIs. Now they have to consider what to do.

The costs to build out cloud infrastructure can cost you plenty if you go with an enterprise cloud services provider. Go with AWS and it’s comparatively pennies on the dollar. It’s why OpenStack has to be an alternative. It’s role is critical right now. AWS has the potential to get too big and too dominating. To combat it, OpenStack has to do a better job of governance. If it can do that, then even the enterprise cloud services providers will win. They need an alternative to AWS for public cloud services that fit with private cloud offerings. If OpenStack doesn’t exist then they have no other options. And that does nothing for the overall health of the market.