Good Bye VMware, Hello OpenStack. PayPal Axes Virtualization Giant
A couple of years ago (almost to the day) Forbes covered the suggestion that PayPalwas going to drop VMware from its infrastructure in favor of OpenStack. The article actually impacted upon VMware’s VMW +0.65% share price for a time and it only surfaced later that PayPal was only making an initial foray into OpenStack. VMware breathed a sigh of relief.
VMware will be catching its breath again today on the news that PayPal has converted almost 100 percent of the traffic of its web/API and mid-tier services to run on an internal private cloud that has been built on OpenStack. A massive story for OpenStack, but some very bad press for VMware.
In a blog post about the news, PayPal’s vice president of global platforms and infrastructure, Sri Shivananda, pointed out the massive scale at which PayPal works – last year the company served 162 million customers, across 203 markets and in 26 different currencies, who transacted $228 billion in total payment volume. To allow that growth, PayPal has been reinventing all the parts of its business, including its core infrastructure – OpenStack gives them the agility, availability and manageability that they need. By extension, he’s saying that VMware doesn’t. Ouch.
Part of the project has been rearchitecting PayPal’s platforms from a traditional manual-build-on-demand model to a multi-tenant private cloud infrastructure with end-to-end automation. The company has been dabbling with OpenStack for years; it first rolled out some OpenStack based infrastructure back in December, 2011. Since then, PayPal has closed watched the maturing of the OpenStack project and decided recently that it was sufficiently stable to go “all in” with it.
According to Sivananda, OpenStack has delivered them plenty of agility:
With our private cloud infrastructure, we’ve been able to deploy new Java applications and provision infrastructure capacity within minutes – instead of days.
PayPal is actually a contributor to several different parts of the OpenStack project.
It’s hard to see how this isn’t a pretty big PR loss for VMware – it will be interesting to see how they respond. For OpenStack however, this is a significant announcement – expect them to be telling the story far and wide.