Dreamhost has built a public cloud service called DreamCompute that is built on OpenStack, the open cloud infrastructure. The new infrastructure as a service (IaaS) shows how a federated, universal cloud shows market promise to give customers a greater choice from open and proprietary offerings.

Dreamhost, a longstanding hosting provider, has over the past few years been active in OpenStack. Its participation falls in line with its development of an open source, next-generation storage service called Ceph that is compatible with offerings from the likes of Rackspace and Amazon Web Services (AWS). Ceph serves as a core aspect of DreamCompute as does Nicira’s network virtualization platform. Nicira is the network virtualization technology provider that VMware acquired this summer for $1.2 billion. Nicira is a core networking technology in OpenStack. DreamCompute also provides API compatibility with the OpenStack APIs, including Nova Compute, Quantum Networking, and Cinder for block storage.

DreamCompute is a noteworthy development for OpenStack, the open infrastructure that anyone can use to build their own cloud. It is further proof that the movement is gaining momentum. Last week, Cloudscaling announced it would offer compatibility with the Google Compute Engine (GCE) APIs. OpenStack is the largest open source project in the world. It has more than 5,600 individual members representing more than 850 organizations in 88 countries. The OpenStack Foundation has secured $10 million in funding from members and from 21 platinum and gold corporate sponsors. The group’s twice a year event begins today in San Diego.

The new DreamCompute service will cater to developers and “Internet entrepreneurs.” It will offer a host of services such as test and development, advanced analytics and as a platform for applications. The service can handle workloads from 1 gigabyte to 64 gigabytes RAM.

Ceph plays as a a strategic factor for DreamCompute. It’s powerful in that it helps companies use multiple cloud providers. As Scott Merrill wrote last month, Ceph offers API compatibility with Amazon S3 and OpenStack Swift, the storage backend that Rackspace uses, which makes it easier for DreamHost to court customers from both of those services.

Nicira’s network virtualization platform integrates as a plugin to OpenStack’s open source Quantum networking platform, enabling programmable virtual networking features for DreamCompute customers. This makes the service similar to AWS, which is the closest we have to making the cloud serve as giant computer that we can program the way we want it. It also means the DreamCompute service can be federated across multiple providers.

DreamCompute will compete with AWS, GCE, Rackspace, HP and no doubt even more providers that see OpenStack as the core foundation for building public cloud services.

The news generation of OpenStack offerings will ride a rising tide of demand for cloud services. Greater federation means more choice for customers and creates a marketplace where the overall health of the market is defined by its overall diversity.

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