In a further consolidation of the technology market that has seen several multibillion-dollar acquisitions in a down economy, EMC on Monday announced an agreement to acquire Isilon Systems for $2.25 billion, or $33.85 a share. Isilon makes network attached storage systems and has carved out a niche in the rapid-growth "scale-out NAS" segment. IDC predicts that sector of the network attached storage market will grow about 36 percent annually and be worth $6 billion by 2014.
"The unmistakable waves of cloud computing and 'Big Data' are upon us," said Joe Tucci, chairman and CEO of EMC. "Customers are looking for new ways to store, protect, secure and add intelligence to the vast amounts of information they will accumulate over the next decade."
A Billion-Dollar Combo
Tucci said by adding Isilon, EMC sits at the intersection of the Big Data and cloud-computing trends. Indeed, EMC's Atmos and Isilon solutions will offer customers a highly scalable, low-cost storage infrastructure for managing Big Data in public or private clouds.
Isilon's scale-out NAS systems are designed to begin small and scale quickly and non-disruptively up to 10 petabytes in size, with extremely high levels of performance and availability. EMC's Atmos object storage complements Isilon for globally distributed environments and access to for usages like Web 2.0 applications. EMC expects their combined revenues will reach a $1 billion run rate during the second half of 2012.
Sujal Patel, CEO of Isilon, said he's excited about joining EMC. He pointed to EMC's
track record of successfully acquiring, integrating and growing companies and the complementary nature of the technologies. He expects EMC to take Isilon "to the next level" and accelerate its growth.
Pund-IT principal analyst Charles King said the key to understanding the Isilon deal is that the company's robust scale-out NAS platform has made it a leader in many cloud-related services, including social networking and media sites.
Though neither NewsFactor nor King can verify it, there are reports that suggest Isilon is the storage platform for Facebook and MySpace, is used to stream media for the BBC iPlayer, and is the storage platform for NASA's global satellite image library.
"The company is a leading player in the cloud-related markets and services on which EMC is highly focused. As a result, it should also complement EMC's Atmos storage cloud and offer a bridge between internal private clouds and external public cloud services," King said. "Finally, Isilon's NAS expertise is likely to provide next-generation capabilities for existing EMC NAS products, thus helping it to more effectively compete against vendors, including NetApp."
In connection with this announcement, EMC is reaffirming its previously issued business outlook for 2010 that it released on Oct. 19. For all of 2010, EMC expects consolidated revenues of $16.9 billion.