EMC Acquires Storage Specialist Isilon for £1.4 Billion

EMC continues to expand its corporate kingdom after announcing that it is acquiring Seattle-based network-attached storage (NAS) provider Isilon Systems.

EMC is paying $2.25 billion (£1.4 billion), or $33.85 (£21.05) per stock share, in cash.

EMC, which brings in $14 billion (£8.7 billion) per year and has $7 billion (£4.3 billion) in cash on hand, said the transaction is expected to be completed late this year and “is not expected to have a material impact” on its 2010 net worth.

The company’s stock price was flat at about $21.50 (£13.37) per share on 14 November.

Clustered Storage Arrays

Isilon made its early reputation by making storage arrays that can easily be clustered to multiply data storage processing power for large-scale workloads. In the last two years, however, the company has increased its market scope by selling smaller, iSCSI-based systems that can be used by corporate remote offices and midrange-size companies.

EMC plans to pair up Isilon’s NAS file system with its object-oriented storage division, EMC Atmos, to provide a new, high-level platform for companies planning to build private cloud systems to process globally distributed workloads.

EMC claimed that the combination of Isilon and Atmos will provide its customers with “a complete storage infrastructure solution for managing ‘Big Data’ in private or public cloud environments.”

The pairing of the two approaches to storage technology into one package will offer new options for IT managers to handle scale-out workloads that contain both structured [database] and unstructured [object-oriented] data sets.

The Hopkinton, Mass.-based corporation said its expects the combined revenue of these two highly complementary storage offerings to reach a $1 billion (£622 million) run rate during the second half of 2012.

EMC has reached the $1 billion-or-more-in-new-business level with several of its acquisitions during the last decade, including RSA Security, VMware, Avamar, and Data Domain.

Isilon systems can start small, grow incrementally.

Scalable Storage Racks

Isilon’s scale-out NAS storage racks can begin as small (less than 100TB) installations and scale up to 10PB yet maintain all their high-availability features without being disruptive to the rest of the system.

“EMC brings unique value to Isilon through our highly complementary portfolio, engineering depth, financial strength and global sales reach,” EMC President and COO Pat Gelsinger said.

“Isilon will enable EMC to accelerate our storage revenue growth and serve our customers across a broader range of the storage systems market. EMC will invest in all aspects of Isilon’s business to accelerate growth and take advantage of the fast-growing market opportunity ahead.”

Technology Business Research storage analyst Greg Richardson wrote in an advisory to eWEEK that the acquisition will “open new doors to expansion in high-growth vertical markets” for EMC.

“We believe this will … better position EMC against competitors that maintain large, vertical-centric solutions businesses, such as IBM, Fujitsu, and, increasingly, Dell,” Richardson said. “Additionally, 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.

“As a result, EMC will add another arrow in its quiver to drive the adoption of public and private cloud infrastructures.”

Like many start-ups — even in the fast-growing storage sector – Isilon had to go through some financial pain before finally getting into the black this year.