At its core, OpenStack is an operating system that builds public or private clouds. But OpenStack is a platform, it's not just one piece of software that's downloaded and installed to "voila!" build a cloud.
Instead, OpenStack is made up of more than a dozen components that control the most important aspects of a cloud. There is a project for the compute, networking and storage management of the cloud. Others for identity and access management and ones for orchestrating applications that run on top of it. Put together, these components enable enterprises and service providers to offer on-demand computing resources by provisioning and managing large networks of virtual machines.
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The code for each of these projects can be downloaded for free on GitHub and many of these projects are updated twice a year when a new release comes out. Most companies that interact with OpenStack will do so through a public cloud that runs on these components, or through a productized version of this code distributed by one of the many vendors involved in the project. It's still important to know the pieces that make up the project. So here is OpenStack 101.
OpenStack was started in 2010 when Rackspace and NASA came together. NASA contributed the compute aspect, while Rackspace contributed the storage. Today, that compute project lives on as Nova.
Nova is designed to manage and automate the provisioning of compute resources. This is the core of the virtual machine management software, but it is not a hypervisor. Instead, Nova supports virtualization technologies including KVM, Xen, ESX and Hyper-V, and it can run on bare-metal and high performance computing configurations too. Compute resources are available via APIs for developers, and through web interfaces for administrators and users. The compute architecture is designed to scale horizontally on standard hardware. New in the Icehouse release are rolling upgrades, which allow OpenStack clouds to be updated to a new release without having to shut down VMs.
Nova can be thought of as the equivalent to Amazon Web Service's Elastic Compute Cloud (EC2).
Code-name: Neutron (formerly Quantum)
Neutron manages the networking associated with OpenStack clouds. It is an API-driven system that allows administrators or users to customize network settings, then spin up and down a variety of different network types (such as flat networks, VLANs or virtual private networks) on-demand. Neutron allows for dedicated or floating IP addresses (the latter of which can be used to reroute traffic during maintenance or a failure, for example). It supports the OpenFlow software defined networking protocol and plugins are available for services such as intrusion detection, load balancing and firewalls.