EMC Buys Isilon To Fortify High-End NAS Line

EMC on Monday said it plans to acquire Isilon Systems, a developer of scale-out NAS technology, in a $2.25 billion bid to close a storage product gap in relation to such competitors as NetApp.

Isilon's OneFS operating system allows customers to add storage nodes without disrupting storage operations up to a maximum of 10.4 petabytes in a single file system. Performance of the company's storage architecture also scales with the addition of storage nodes to up to 45 GBs per second.

Rumors of a possible EMC acquisition of Isilon first surfaced last month.

Isilon has been on a short-list of potential storage acquisitions after Hewlett-Packard beat Dell in a short but intense bidding war to acquire 3PAR, a developer of scalable Fibre Channel SAN technology.

EMC plans to bring the Isilon product line together with its own Atmos storage appliances, which provide massive scalability for storage clouds. The company expects the two to provide customers a scalable, low-cost storage infrastructure for managing what the company calls "Big Data," or the large data stores produced by applications in such markets as life sciences, media and entertainment, and oil and gas.

Aaron Rakers, an analyst with research firm Stifel Nicolaus, wrote in a report based on the acquisition that EMC expects the Isilon and Atmos products together to become a $1 billion storage business by the second half of 2012.

The acquisition will also increase EMC's competitiveness against arch rival NetApp, which has its own scalable NAS product line. Isilon has always considered NetApp its primary competitor.

"We believe this move by EMC will raise competitive questions/concern over NetApp's positioning in clustered NAS ... (Isilon said) it predominately competes with NetApp in the scale-out NAS market," Rakers wrote.

With Isilon and Atmos, EMC is strengthening its ability to be a major player in the cloud storage business, said Greg Richardson, an analyst at research firm Technology Business Research.

"Isilon’s ability to scale up and down enables the company to continuously align storage capabilities with changing demand, making the solution a strong component of the Cloud," Richardson wrote. "As a result, EMC will add another arrow in its quiver to drive the adoption of public and private Cloud infrastructures."

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EMC's $2.25 billion bid for Isilon represents a 29 percent premium over Isilon's Friday closing share price. The acquisition is expected to close by year-end.

EMC has already invested a total of over $13 billion on over 50 strategic acquisitions, the company said.

The company most recently acquired data warehouse technology provider Greenplum. Greenplum is the developer of what it calls "Enterprise Data Cloud" solutions for large-scale data warehousing and analytics. Those solutions, based on a massively parallel processing system, support the data warehousing and large scale analytic processing requirements of companies managing terabytes or petabytes of data.

Pat Gelsinger, president and COO for EMC Information Infrastructure Products, said in a statement that the acquisition will enable EMC to accelerate its storage revenue growth and broaden its ability to serve storage customers.

"EMC will invest in all aspects of Isilon’s business to accelerate growth and take advantage of the fast-growing market opportunity ahead," Gelsinger said.