Advanced Computing in the Age of AI | Saturday, December 9, 2023

EMC Buys Spot On OpenStack Bandwagon With Cloudscaling Deal 

EMC has confirmed reports earlier this week that it is acquiring OpenStack distributor Cloudscaling as the storage leader tilts further toward the open source cloud controller as a way to expand support for it public cloud services.

"To further extend our breadth of cloud platform support, including VMware and others, EMC has signed a definitive agreement to acquire Cloudscaling," EMC spokesman Dave Farmer confirmed.

Itself a possible takeover target in a consolidating storage sector, EMC did not disclose terms of the deal. Citing unnamed sources, Bloomberg reported that the deal was worth less the $50 million.

Farmer added that more details about the deal and EMC cloud strategy would be forthcoming at an EMC "cloud launch event" on October 28.

Teri Elniski, a spokeswoman for San Francisco-based Cloudscale, said the company would have no comment on the deal with EMC.

Founded in 2006, Cloudscaling describes itself as a leading provider of OpenStack-based Infrastructure-as-a-Service for private and hybrid clouds. The company's Open Cloud System (OCS) operating system manages computing, storage and networking in the cloud.

The company recently rolled out its OCS 3.0 that integrates OpenStack distribution based on Icehouse. Interestingly, the latest release of OCS includes additional support for storage hardware, including gear from EMC rival Hewlett-Packard.

Last year, Cloudscale raised $10 million in a Series B funding round led by Trinity Ventures. The round also included new investors Juniper Networks and disk and solid-state drive maker Seagate Technology. Cloudscaling raised a total of $14 million

At the time it raised its second round, Cloudscaling attributed its market momentum to customers seeking "more than OpenStack. They want an on-premise, OpenStack-based private or public cloud turnkey system solution that delivers architectural and behavioral fidelity with major public clouds like Amazon Web Services."

The company further argued that its OCS met that requirement by enabling "hybrid cloud application deployments that span private and public cloud services.”

The EMC-Cloudscaling deal is the latest in a flurry of acquisitions around the OpenStack ecosystem as storage rivals seek to make their products more compatible with open source software.

In September, Cisco Systems acquired privately held Metacloud, which deploys and operates private clouds based on the OpenStack cloud controller. The deal is intended to accelerate Cisco's Intercloud strategy aimed at connecting private, public, and hybrid clouds via OpenStack software.

Under pressure from investors to spin off its VMware unit, EMC's Cloudscaling acquisition comes as it contemplates its options in a consolidating cloud storage market. HP, a key supporter of the OpenStack cloud controller, also made a move in September by acquiring cloud controller pioneer Eucalyptus Systems. That was followed by last week's announcement that HP was breaking into two parts, including a server, storage, software and services unit called HP Enterprise.

These and other recent moves toward OpenStack are aimed at competing with major public cloud providers like Amazon Web Services, Google Compute Engine, and Microsoft Azure. This also obviously puts EMC in contention with VMware, which has its own stack of cloud controller tools, sold under the vCloud and vRealize brands, and which also operates its own public cloud, called VMware Air.

Meanwhile, more consolidation is likely, including speculation that HP could ultimately move to acquire EMC.

About the author: George Leopold

George Leopold has written about science and technology for more than 30 years, focusing on electronics and aerospace technology. He previously served as executive editor of Electronic Engineering Times. Leopold is the author of "Calculated Risk: The Supersonic Life and Times of Gus Grissom" (Purdue University Press, 2016).