Red Hat intends to fix 'broken' Ceph storage price model

Red Hat plans changes to subscription pricing model for Ceph software based on customer feedback, according to the director of product management.

BOSTON -- Red Hat plans to change the "broken" pricing model for its Ceph storage software based on customer feedback...

that the per-node fee structure for subscriptions is not working.

Neil Levine, a director of product management at Red Hat, said the new pricing model will combine a capacity element with an entitlement to a certain number of nodes. He said he wasn't able to get the pricing changes ready in time for this week's Red Hat Summit, but he hopes the new model will launch in about three weeks.

Levine, who joined Red Hat after the company's May 2014 acquisition of Inktank and its Ceph software line, disclosed the plan yesterday in response to a question following his presentation entitled "Past, present & future of Red Hat Ceph Storage." Red Hat Ceph Storage is based on open source Ceph software, in line with the company's overall business strategy.

"What customers do in the storage world is [say] 'I want x amount of storage,'" Levine said. "And so that's the conversation we want to have, but we still want to be able to give you a certain number of entitlements to RHEL [Red Hat Enterprise Linux] and the software, so you can run it on the right number of machines and that's properly audited."

Levine said Red Hat's per-node model didn't work for all customers with the "kind of volumes we were doing," and he hopes the new model will "be a bit more suitable for everybody." He said he is not sure if the per-node pricing model for the company's other storage product, Red Hat Gluster Storage, would change.

"Gluster and Ceph are really deployed in very different ways in different volumes, in different capacities. So, Gluster is not broken, whereas the Ceph pricing model was broken," said Levine, adding that the company is going to "fix" the Ceph pricing "first."

Sayan Saha, head of project management for Red Hat Gluster Storage, said the company has not received many customer requests for capacity-based pricing of Gluster. "Our node-based pricing has been OK," he said.

Few customers seek shift in Gluster pricing model

One of Red Hat's large storage customers disagrees with the vendor's take on Gluster pricing. Fair Isaac Corp. (FICO) stores more than a petabyte of data using Red Hat Ceph Storage but chose an open-source version of Gluster on top of Ceph for deployments that require a file system. Nicholas Gerasimatos, FICO's director of engineering for cloud services infrastructure, said pricing was the main problem with Red Hat's Gluster.

FICO would have had to pay per-node pricing for both Red Hat Ceph and Red Hat Gluster, and that would have made no sense, he said.

"The pricing model has been complex and needs to be simplified," Gerasimatos added later via an email. "For example, if you want to run Ceph, Gluster, OpenShift, and OpenStack on a single node it requires multiple licenses. The need to simplify the model makes sense, especially since cost related to capacity would make sense."

Saha said the FICO scenario of using Gluster on top of Ceph is still rare, cropping up in customer conversations only once every month or two.

"If we start getting a lot of requests from people, like the FICO use case, we'll have to come up with something so that we don't have to charge them double," he said. "I would concede on that."

Saha said the introduction of unified storage controller technology could potentially address the pricing issues. At this week's Red Hat Summit, the company demonstrated unified management technology that will allow customers to manage Ceph and Gluster from the same console, but officials did not disclose the estimated release date.

"If we looked at, 'OK, what is your total managed Red Hat storage,' and we price it accordingly, then it takes away, 'OK, I'm paying for Ceph; I'm paying for Gluster separately.' So, there are ways to work around that," Saha said. "I'm not saying we'll do that."

Red Hat faces competitive pricing

Per-node versus capacity-based is not the only pricing challenge facing Red Hat. Rivals with products based on open source software as well as established storage vendors have been offering deals within close range or even significantly lower than Red Hat's pricing, according to some Summit attendees.

David Manchado, a Madrid-based infrastructure architect with Santander Group's IT group, Produban, said traditional vendors such as EMC and Fujitsu want to remain in place and are competing on price for large installations with high volumes of data.

"We have proposals including both hardware and software that are lower than the prices for Red Hat," said Manchado.

Santander currently stores approximately 30 TB of data, not including replicas, using Red Hat Ceph Storage, according to Manchado. But, he noted the relative ease with which a user can replace software-defined storage, which can run on commodity hardware, in comparison to traditional storage.

"If in the future there is something that fits better for our specific need, we have not closed our mind," Manchado said.

The competition is especially fierce on the OpenStack front. Craig Hadix, a data center architect for a global systems integrator, said Red Hat needs to cut its prices in half because the OpenStack competition from vendors such as Mirantis is in that range.

"The whole reason people will be open to OpenStack is because VMware priced [itself] out of the business," said Hadix, who asked to not identify his company.  "Red Hat's starting to do this a little bit, and I think it's not intentional. I think it's just by negligence. They're not focusing on the pricing model, and they really need to think that through better."

Hadix said his clients, which span industries such as finance and entertainment, have a budget, and when the price gets too high, they have gone with the open source code over Red Hat, he said.

"We're not talking about a VMware environment where a bunch of Windows folks really don't get under the hood. These guys know what they're talking about," he said. "When you start getting into a higher technical engineer like this, it's just as easy to go open source. Once they build it themselves, the rooster's left. It's gone. And [Red Hat is] not going to be able to get that subscription back."

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Does Red Hat need to change its pricing model for storage?
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I suspect part of the problem is that Red Hat needs to do a better job of differentiating between Ceph and Gluster -- or else find a way to make them play together better, at least on the business end.
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