Nebula Closes: Is OpenStack Cloud Computing Still Anyone's Game?

In a sign that OpenStack clouds are becoming the purview of only the high and mighty—not to mention wealthy—companies that can fund their own distributions of the open source platform, OpenStack-based private cloud vendor Nebula announced its closing this week.

Nebula, founded in 2011, built a business around OpenStack by using the platform to build private clouds on enterprises’ existing hardware. Investors saw promise in the company early on, supplying a total of $38.5 million in venture capital through several rounds of funding in 2011 and 2012.

But on April 1—and no, there’s no indication this was a prank—Nebula announced on its website and Twitter that it was ceasing operations. It said the private clouds it has provided to customers will continue to operate, but that it will no longer offer support for them, and suggested that customers consider adopting an OpenStack solution from another vendor.

Those other vendors are big-name companies including IBM (IBM), Red Hat (RHT) and Hewlett-Packard (HPQ) (each of which Nebula mentioned specifically in announcing its closing), which have used their own capital and development resources to build OpenStack distributions in-house in recent years. By most indications, their competition is what led Nebula to fold.

The lesson for the channel, then, is that, despite OpenStack’s open-source nature and humble origins as a community-led project, the OpenStack world has now become mature enough that startups such as Nebula may have trouble finding commercial success for the OpenStack solutions they try to build. Larger software vendors that can integrate OpenStack into ecosystems that already exist have an advantage that even generous venture funding cannot overcome.

Of course, that doesn’t mean all hope is lost for the small fry among us. Just like Linux, OpenStack can be packaged and distributed by anyone, and it’s likely that niche OpenStack variants will continue to pop up. But, also like Linux, OpenStack may now only work in a commercial setting with the involvement of a major company—or the OpenStack equivalent of a guy like Mark Shuttleworth, who threw his personal fortune into the fray to make Ubuntu commercially viable.