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Red Hat raids cloud storage market by acquiring Gluster

Gluster's open source software creates massively scalable storage pools and also ushers in Red Hat's cooperation with OpenStack

By , Network World
October 04, 2011 02:44 PM ET

Network World - Red Hat announced Tuesday that it is acquiring Gluster, which makes open-source software that clusters commodity SATA drives and NAS systems into massively scalable pools of storage, in a cash deal valued at about $136 million. Gluster is also a contributor to the OpenStack cloud project and Red Hat is promising this involvement will continue. Indeed, Red Hat is now uncharacteristically saying its support of OpenStack will grow even beyond Gluster to the next release of Fedora.

This is the first acquisition Red Hat has made in 2011 and the deal is expected to close pretty much immediately, in October.

MORE DEALS: 2011's Top Tech M&A Transactions

Gluster, which was founded in 2005, has its R&D and engineering facility in Bangalore, India, while its leadership team resides in California. The company's flagship technology is GlusterFS, which allows an enterprise to cluster large numbers of commodity storage and compute resources into a centrally accessible and managed and storage pool. It names Pandora, and Samsung among its customers.

"100 terabytes [of unstructured data] is peanuts today. One terabyte has become a very common use case for Gluster. We used to think petabytes was big. Nowadays a few petabytes is not a big deal," Gluster's founder AB Periasamy said during the acquisition announcement webcast.

Gluster's sweet spot is in managing unstructured data and in this regard it competes with open-source project Hadoop, which has the backing of big players Google and Yahoo and has also grown in popularity in recent years. Gluster differs from Hadoop in that it has no central meta data server but is fully distributed, the company says. Applications can access the data as regular files and folders (POSIX compatible).

Red Hat is looking to Gluster to gain entry into a new market for it, storage. Research says unstructured data storage is a $4 billion market, and will grow 44 times larger by 2020, according to Brian Stevens, vice president of engineering for Red Hat. Gluster has always been based on Linux and "is already optimized to Red Hat Linux systems running on x86 systems," Stevens says, which makes it a natural fit to acquire. "In minutes, customers can install a Gluster-based service and start a scale-out pool."

Software-based storage is particularly important for companies using public clouds because for clouds, storage "has to be software. You're not going to run a hardware solution on top of Amazon's cloud," says Stevens, adding that Gluster "is not a replacement for something IT is doing," but will support new cloud-based services that IT wants to roll out.

On the other hand, Gluster postions itself as 50% cheaper than legacy hardware-based storage systems. So clearly Red Hat is looking at Gluster to compete with the likes of EMC and Hitachi.

"Gluster changed the storage market the way Linux changed the operating system market," Charlie Peter, Red Hat's CFO, said during the webcast. However, he also said that he doesn't expect Red Hat to turn a profit on subscriptions of Gluster through the rest of this fiscal year and perhaps not next year either. As a private company, Gluster's current profitability isn't known.

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