HDS Acquired ParaScale IP

No press release or any official announcement. Just a sentence published on his blog by Miki Sandorfi, chief strategist, file and content services, at HDS: "I am excited to announce that we have recently acquired the IP and brought on board the core engineering team of a cloud storage software start-up called ParaScale."

Based in Cupertino, CA, ParaScale was born in 1994 and got $11.37 million in Series A financial funding in 2008 to finally crash last June as it could not fin new investors. It developed a file virtualization software for cloud storage that HDS needed to be a serious actor in this field. It aggregates HDDs on multiple Linux servers to provide a storage cloud accessible via standard file-access protocols (NFS, HTTP, FTP) and delivers storage capacity of petabytes and parallel throughput. A single administrator can manage hundreds of servers, with the system automatically balancing out hot-spots and capacity utilization across the various nodes.

No price has been revealed but it’s probably a small amount, a few millions of dollars. HDS, a subsidiary of Hitachi, is reluctant to buy companies, like many Japanese firms, and generally preferred to sign strategic relationship with outside firms to get the new technologies they need. In the past, HDS acquired only two small companies, Comstock Systems in 2002 and Archivas in 2007, both of them for $20 million. That’s all. By comparison, EMC has bought more than sixty firms to strengthen its storage portfolio.

In our meeting with executives, we have remarked that the Japanese subsidiary didn’t like to reveal its technology partners because it wants to appear as a company able to do it all in its R&D lab in Japan and USA. This acquisition proves the contrary. No one big actor is able to embrace all the new coming storage technologies without the help of start-ups or partners.