OpenStack cloud vendor Nebula, which was started up by OpenStack founder and former NASA CTO Chris Kemp in March 2011, is ceasing operations effective April 1. The news was not expected and raises questions about the OpenStack ecosystem and the multiple vendors within it.
“This is a difficult announcement for us to make and we want to assure our customers, shareholders, and employees that we have worked hard to explore alternatives and exhausted all potential options,” Nebula stated in a statement on its Website.
Nebula’s most recent update in December 2014 was its Cosmos Enterprise Edition, based on OpenStack Icehouse. Cosmos is the software that runs on Nebula’s premier piece of technology, the Nebula One controller. In a 2014 video interview, Kemp demonstrated the Nebula One controller, which enables an enterprise to take its server deployments and transform them into a private OpenStack cloud.
In September 2013, Kemp brought in the former CEO of Extreme Networks, Gordon Stitt, to serve as CEO. In a video interview with eWEEK in May 2014, Stitt and Kemp explained how Nebula was growing into a turnkey OpenStack cloud business. Now just under a year after that interview, Nebula is done as operational business entity.
In my opinion, the end of Nebula is a surprise. Hindsight, of course, is always 20/20, and perhaps there are some leading indicators and trends that can help explain Nebula’s demise.
I remember very clearly the first time I spoke with Kemp, as it was the first time I had ever been briefed about OpenStack. I was pitched by a PR person on the opportunity to speak with the CTO of NASA, and on July 18, 2010, I got on the phone with Kemp to talk about the new cloud effort that NASA was set to jointly launch on July 19, 2010, with Rackspace at the OSCON open-source conference.
Make no mistake, the star power of having NASA’s CTO talk to press and be on stage to announce a new open-source cloud effort was the draw that attracted me and likely many others to the initial OpenStack announcement.
In the first video interview I ever did with Kemp, which was in 2012, he explained how OpenStack could well be among the top contributions to humanity that NASA has ever made. While NASA initially helped to lead the project, by 2012, the space agency already was pulling back and enabling the private sector to step in.
That’s where Kemp’s company Nebula has played a pivotal role over the past four years. Nebula employees have been OpenStack Project Technical Leaders (PTLs) for various OpenStack projects, helping to push them forward. The contributions they have been made are the foundation upon which OpenStack has been able to expand and prosper.
When Kemp helped to start OpenStack, it was just NASA and Rackspace. Over the last four years, OpenStack has grown to now include the support of many of the world’s leading IT vendors, including IBM, Intel, HP, Dell, AT&T, Comcast, Cisco, EMC and many others.
OpenStack Innovator Nebula Ceases Operations: Is OpenStack in Trouble?
A host of OpenStack startup companies have also emerged over the last four years. Kemp’s NASA co-worker Joshua McKenty started Piston Computing, though McKenty left Piston for Pivotal in September 2014. Rackspace alumni helped to found SwiftStack, which announced back in October 2014 that it had raised $16 million in new funding to fuel its efforts.
Then there is Mirantis, which in October 2014 raised $100 million in funding for its OpenStack efforts. Alongside the new players, HP, IBM, Red Hat, SUSE and Canonical have all been pushing their respective OpenStack efforts.
Simply put, there is a lot of competition in the OpenStack market in 2015, and there is a lot of invested capital. A 2013 forecast by the 451 Group had projected that the OpenStack cloud market would generate over $1 billion in revenue by 2015.
So what happened to Nebula? Why did it fail?
For one, running a startup is hard. Although OpenStack is open-source software, Nebula’s operations required capital, as the Nebula One controller is hardware. Nebula, like all startups, also needed capital for engineering, sales and marketing staff. Growing a sustainable sales pipeline is never an easy task and is made even more difficult in the face of intense competition.
We don’t know the full details of Nebula’s operational costs or sales at this point, but the fact that the company was forced to cease operations implies that its cash flow and sales pipeline weren’t enough to fund ongoing operations and there wasn’t new funding (venture or otherwise) to fall back on.
While Nebula’s demise is unfortunate, it does not imply that OpenStack itself is at risk. What Nebula’s demise does indicate, however, is that while OpenStack represents a great opportunity for many vendors, it doesn’t represent a great opportunity for every vendor.
Given the continued interest and demand that many other vendors see in OpenStack, I strongly suspect that the skilled and talented staff at Nebula will be quickly re-employed. As for Kemp, I can count on one hand the number of IT executives of his caliber. He is a true gentleman, technologist and all-around exemplar of the human species.
As Kemp himself tweeted on April 1, “Ad astra per apsera,” Latin for “through hardships to the stars.”
Sean Michael Kerner is a senior editor at eWEEK and InternetNews.com. Follow him on Twitter @TechJournalist.