Linux software company Red Hat has agreed to pay $136 million for an open-source data storage software company in a move designed to enhance the Raleigh company's cloud computing offerings.
Red Hat announced Tuesday that it is acquiring Gluster, which is based in Sunnyvale, Calif., and has a research and development office in Bangalore, India. Gluster has about 60 employees.
Founded in 2005, the privately held company has been funded by venture capitalists. Its software is used by more than 150 customers, including Deutsche Bank, Samsung, Autodesk, Barnes & Noble and Pandora.
Gluster's software specializes in storing enormous amounts of data, often called big data.
The explosion of big data, and companies' desire to store that data over the Internet, is forcing corporations to seek out new technology.
Red Hat is counting on companies turning to open-source software for their storage needs. The company says the market that Gluster's software addresses is about $4 billion and growing.
"We believe this is the right time and the right opportunity to invest for growth," Chief Financial Officer Charlie Peters said during a conference call.
Open-source means that customers have access to the computer code behind the software and can tweak it as needed.
The data storage arena is dominated by proprietary software integrated with specific hardware.
But Gluster's software can run pretty much on any hardware and, with Red Hat's marketing muscle, it should be able to make inroads, said Henry Baltazar, senior analyst at The 451 Group.
"Essentially, I like the deal," he said.
Baltazar said Gluster has been aiming to accomplish in the data-storage space what Red Hat did with operating systems: thrive by providing a less-expensive, open-source software alternative.
Red Hat didn't disclose Gluster's revenue. Peters said that since it's an early-stage company, the acquisition won't have a material impact on Red Hat's revenue for the fiscal year that ends in February.
Red Hat has roughly 700 workers in Raleigh and 4,100 worldwide. Its business has been growing fast; revenue rose 28 percent in the latest quarter and is expected to surpass $1 billion in the current fiscal year.
Data storage is among the hottest IT sectors, and Peters said that Red Hat plans to invest aggressively to expand Gluster's business.
The deal is expected to close this month.
Red Hat shares closed down 57 cents at $39.89 on Tuesday. The company's stock is down 13 percent this year.
