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Cloudian HyperStore gains on-demand pricing, new funding

IT Investment firm Digital Alpha ponies up $125 million to Cloudian. Most of the new money will fund expanded inventory to support consumption pricing of local HyperStore arrays.

Object storage provider Cloudian plans to use $100 million in financing to give enterprises a new cloudlike buying option to deploy its on-premises HyperStore arrays.

Cloudian last week introduced consumption pricing that enables organizations to scale Cloudian HyperStore storage hardware on demand, similar to the way they buy cloud storage. An enterprise can buy a set amount of object storage, for example, and Cloudian will automatically deliver and install additional hardware in a customer's rack as consumption starts to bump up against the capacity limit.

Cloudian isn't the first storage vendor to adopt pay-as-you-go pricing. Hyper-convergence vendors and others who want to provide cloudlike features with their storage are also going down that path. Cloudian already offered pay-as-you-go pricing for its software through Amazon Web Services Marketplace, but now is extending that to on-premises hardware deployments.

The Cloudian HyperStore hardware subscription was rolled out with news that Cloudian had received $125 million from Digital Alpha, an equity fund launched by former Cisco executive Rick Shrotri. Digital Alpha is providing a $100 million credit facility to help Cloudian purchase expanded hardware inventory.

Digital Alpha additionally invested $25 million directly in Cloudian to fuel expansion of engineering, sales and support teams.

Cloudian and object storage: A crowded market

Cloudian chief marketing officer Jon Toor said consumption pricing helps companies convert what would be a capital cost into an operational expense.

"We have some customers that will benefit from having a more flexible procurement model. This lets you pay by the drink, instead of buying the whole bottle," Toor said.

Cloudian HyperStore object storage software is bundled on clustered 4U scale-out nodes. The product supports data replication between physical data centers and the public cloud. 

HyperStore object storage software is sold on integrated Cloudian-branded appliances and industry-standard Cisco and Lenovo servers. Cisco also recently qualified Cloudian HyperStore to run on its Unified Compute Server S3260 storage server.

HyperStore uses the Amazon Simple Storage Service (S3) API to apply data management and data protection services across integrated pools of file and object data. In January, Cloudian added the ability to port data between Amazon S3, Microsoft Azure Blob and Google Cloud Platform.

Until now, only the HyperStore software license has been available as a subscription. Customers can also still purchase Cloudian HyperStore arrays through the traditional pricing model.

Toor said leading use cases for Cloudian include health care, media and entertainment, and more broadly as a data protection target.

Greg Schulz, senior advisory analyst at Server and Storage IO, said selling Cloudian HyperStore hardware as a scalable local service should alleviate management headaches.

"Object storage has been Cloudian's historical message, but they also have hybrid, converged file-based access, as well as cloud tiering," Schulz said. "It makes sense to offer storage as a service on premises. Watch for other vendors to take a similar approach, which makes it comparable to how customers subscribe and pay for public cloud resources."

Product offerings similar to the Cloudian HyperStore offering include the Avere Cloud-Core NAS -- now owned by Microsoft -- and the the Zadara Storage Cloud, both of which support unified block, file and object storage.

Cloudian CEO Michael TsoMichael Tso

Cloudian CEO Michael Tso brushed aside concerns that object storage is a saturated market. Tso said Cloudian doubled its customer base to include about 200 organizations in 2017, most of which he said are large global enterprises.

About half of Cloudian's customers are in the U.S., with 35% in Europe, the Middle East and Africa and 15% in other regions.

"We don't think the market is getting too crowded. We believe the bulk of the market [growth] will be from scale-out work workloads. We can scale across data centers, but we aren't [built] to be as fast as an Isilon or Qumulo. How we differentiate is by having a product that can run any S3-compatible application," Tso said.

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