Who wins in the Nokia-Red Hat deal?

A few weeks ago, Nokia announced that it will offload its Nokia Container Services (NCS) and CloudBand Infrastructure Software (CBIS), plus the 350 employees who support them, to Red Hat.

My initial response was: WUT?

Tl;dr: I don’t know who’s winning in this deal, but I don’t think it’s either one of them. Let me tell you why.

The Deal

The joint press release says that the companies have agreed to tightly integrate Nokia’s core network applications with Red Hat OpenStack Platform, where Nokia will adopt Red Hat’s cloud infrastructure platform for its core network apps. The pair plans to jointly support and evolve NCS and CBIS customers, and will develop a path for them to migrate to Red Hat’s platforms over time. Basically, Nokia will hand over its private cloud infrastructure and container business to Red Hat so it can focus on cloud core applications and software. 

The press release coyly says “cloud,” but it’s built on OpenStack and OpenShift, which we all know is Red Hat’s private cloud (#fakecloud) tech. I don’t know which I feel most sorry for: Nokia, for thinking it’s smart to adopt Red Hat’s private cloud infrastructure platform, or Red Hat for getting served a heaping helping of its own dog food.

What’s my beef against private cloud? Well for starters, have you ever thought about what it takes to get a private cloud up and running? Just take a look at this CNCF Cloud Native Interactive Landscape imageTHIS is why private cloud is a disaster:

Cloud landscape

As a CTO or CIO of a telco, selecting private cloud as your cloud platform means you are committing the techies in your organization—and probably committees of people—to making over 200 tech selections just to get it up and running. Those 200 decisions consist of all different kinds of products, with different underlying technologies, install processes, and integrations, that your organization is now burdened with maintaining. On top of that, no two private clouds are the same; you are basically 100% on your own. Each instantiation of a private cloud is its own bespoke morass. And that’s BEFORE you get down to supporting your actual work: installing the northbound and southbound applications you need to support the lifeblood of a telco. It makes me tired just thinking about it.

OpenStack: Buyer Beware

Perhaps Nokia sees the RedHat platform as simplifying and standardizing some of those 200 decisions. For the blissfully unaware, OpenStack is an open-source cloud platform that was supposed to give users an alternative to the big public clouds. OpenStack’s several components provide compute, networking, storage, and other fundamentals you need to build your own private cloud. 

While a nice idea in theory, the project has been dying a slow death for years. Why? R&D of the platform has been way too slow, especially when compared to AWS, which had a head start and a big budget. When Microsoft and Google Cloud got in the game, the idea of public clouds took off, and potential customers realized that OpenStack would never be able to catch up. OpenStack has been relegated to the realm of private clouds, and now is most famous for being impossibly hard to install and deploy.

I’m not the only person who thinks this, either. Gartner’s Lydia Leong, aka @cloudpundit on Twitter, called it back in 2011, predicting that most users would choose commercial software over the community-built option due to the difficulty of adding features required by large-scale customers in a way that wouldn’t unnecessarily splinter and complicate the solution’s landscape of variations. In a few words: OpenStack is just too hard.

Now, almost every industry has stopped using it—except telco. Red Hat is the leading contributor to OpenStack, so I can conclude only that Nokia decided to give Red Hat its crap back so it can deal with it.

Why public cloud

I’ve said it before and I’ll say it again: don’t build your own #fakecloud. Remember, with the public cloud, the platform is maintained and constantly improved for you. All you gotta do is use it. Public clouds like AWS, Google Cloud, and Azure have been game-changers, outpacing traditional models and disrupting the industry with their agility, scalability, and innovation. They’ve been breaking new ground, democratizing access to sophisticated resources (like genAI and custom chips), and empowering companies big and small. And they’re not slowing down.

Nokia says its liaison with Red Hat isn’t exclusive. You could still run Nokia’s core applications on, say, VMware or Wind River’s cloud infrastructure, or even on one of the hyperscaler platforms. But this is missing the broader narrative—that the key to these platforms is using the tech of public cloud natively. With this deal, Nokia loses because it ties itself to a cloud-agnostic, #fakecloud world, not a public-cloud-native world where all the benefits lie. And that right there is the big miss.

Everyone needs to realize the public cloud giants have already rewritten the rules of the game. With each passing year the hyperscalers’ lead is extended even further; at this point, it’s insurmountable. Vendors like Nokia need to join the #CLOUDCITY Army alongside SaaS vendor Totogi and ride the public cloud wave.

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