Are You Ready for Open-Source Hardware?

According to the Chaos Theory, in a giant system that has lots of interconnections, even the smallest action can have a massive impact. It’s more simply described by the butterfly effect. This theory has taken its toll on the software business, thanks to the rise of open-source software platforms. Today, I learned about a move made by Backblaze, a small San Francisco-based online back-up service that can cause a similar disruption in the storage industry.

The company, whose primary business is selling online storage to consumers for a small monthly fee today, announced that it’s giving away the design of its storage cluster for anyone to use, modify and build upon. The design allows anyone to build large storage clusters -– from a few terabytes to over a petabyte. What’s so disruptive about this? What if I told you that you could build a petabyte-sized cluster for around $120,000?

Now compare that to a couple of million dollars via a storage company like EMC Corp. (s EMC) or a server maker such as Sun Microsystems (s SUNW). The image below actually does a much better job of making a comparison between the Backblaze solution and other commercial storage options.

costofapetabyte.gif Actually if this works, companies like NetApp (s NTAP) and EMC could be in trouble. Just like Linux slowly eroded away the premiums charged by the likes of Sun, these storage giants could see their business be negatively impacted. As the IT world transitions to cloud-based computing, the need for web-scale storage systems is going to increase. Google, for instance, has shown that you can build gigantic storage systems out of commodity parts and smart software.

In their GigaOM Pro report (subscription required), “Will Storage Go the Way of The Server?,” analysts Juergen Urbanski and George Gilbert pointed out that: “The long-term future of storage is about smart software that manages a large pool of cheap interchangeable hardware. Despite being one of the fastest growing technology sectors in terms of capacity, the economics for many participants are deteriorating.”

Looks like Backblaze just wants to accelerate that by giving away its designs. “We are hoping that people who are in the hardware business will take our design and build devices by improving on our design and in turn selling large amounts of storage at an affordable price,” Gleb Budman, CEO and co-founder of the company, told me during a conversation earlier this morning.

“At a fundamental level, we are a software company and we don’t want to build hardware,” he said. The company had to build its own mousetrap because it didn’t have much of a choice. The Amazon S3 offering wasn’t a feasible option, and the high-end systems from Netapp and EMC were way too expensive. Today the company has about petabyte and a half of storage space, putting it in the league of Facebook’s photo storage system.

backblazecluster.gifAt Backblaze, we provide unlimited storage to our customers for only $5 per month, so we had to figure out how to store hundreds of petabytes of customer data in a reliable, scalable way—and keep our costs low. After looking at several overpriced commercial solutions, we decided to build our own custom Backblaze Storage Pods: 67 terabyte 4U servers for $7,867.

A Backblaze Storage Pod is a self-contained unit that puts storage online. It’s made up of a custom metal case with commodity hardware inside. Specifically, one pod contains one Intel Motherboard with four SATA cards plugged into it. The nine SATA cables run from the cards to nine port multiplier backplanes that each have five hard drives. [The Backblaze Blog]

Is this the perfect solution for everyone? Who knows? Gary Orenstein, a storage industry veteran and a guest columnist for us, points out that the company has done a clever job of building a nice, lightweight wrapper around a bunch of drives to produce a system that is fine-tuned for Internet-driven uploads and downloads. Orenstein, who was co-founder of storage startup Nishan Systems, says that the big challenge with a system like this is managing drive failures over time and developing on the platform.

Nevertheless, this move by Backblaze is interesting because it addresses the current logjam in the hardware business. At our Structure 09 conference, Facebook’s VP of engineering, Jonathan Heiliger, lamented how the chip industry and hardware makers fail to address the needs of the big spenders: web companies. Facebook had to build its own mousetraps to met its specific needs. If your startup has open-source hardware designs that meet the needs of today’s web-based businesses, you can easily do an end run around the incumbents.

Budman said that the company is giving away design without any licenses because it doesn’t want anything to come between the design and cheap storage. As long as companies keep innovating, the company is happy with the karma points it notches up. “We hope that the people actually contribute back to the community created around this hardware design,” he said.

Will Backblaze’s big dream come true? It’s hard to say. What is safe to say is that if more companies start contributing their hardware designs in an open source manner, we can expect to see more innovation in the hardware business. So far, hardware innovation has been hampered by the high costs that go hand in hand with innovative products. A few more open-source hardware designs and we’ll soon see tinkering minds get to work.

I would recommend you read our research report, The Future of Data Center Storage. ($79-a-year subscription required.)