EMC Snaps Up Isilon for $2.25 Billion - EnterpriseStorageForum.com
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EMC Snaps Up Isilon for $2.25 Billion

EMC continued its acquisition spree today by signing a definitive agreement to acquire scale-out NAS vendor Isilon Systems for more than $2 billion.

Under terms of the deal, EMC (NYSE: EMC) will pay $33.85 per share in cash in exchange for each share of Isilon (NASDAQ: ISLN) for an aggregate purchase price of approximately $2.25 billion, net of Isilon’s existing cash balance.

Isilon’s OneFS operating system combines a file system, volume manager and RAID into one unified software layer, creating a single intelligent file system that spans all nodes within a cluster. OneFS enables independent or linear scalability of performance and capacity to over 45GBps of throughput and more than 10.4PB of capacity in a single file system. OneFS also delivers “cluster-aware” symmetric multiprocessing (SMP) capabilities that enable the system to move tasks between processors for workload balancing.

Using OneFS, each node in an Isilon clustered storage system is a peer, so any node can handle a request. Using InfiniBand for intra-cluster communication and synchronization, OneFS provides each node with knowledge of the entire file system layout and where each file and part thereof is located. OneFS controls the placement of files directly on individual disks and dramatically improves the performance of the disk sub-system by optimally distributing files across the cluster. By laying data on disks in a file-by-file manner, OneFS is able to control the redundancy level of the storage system at the volume, directory, and even file levels.

IDC projects the scale-out NAS market segment will grow on average approximately 36% annually reaching an estimated $6 billion dollars in 2014. According to EMC, Isilon’s scale-out NAS systems in conjunction with the EMC Atmos platform will provide low-cost storage for so-called “Big Data” – machine generated information.

Stifel Nicolaus analysts Aaron Rakers, Matthew Nahorski and Patrick Newton, pointed out that EMC’s interest in clustered NAS is nothing new. The company’s initial strategy centered on a platform initially codenamed Hulk and formally rolled out as the company's InfiniFlex 10000/12000 solution, which integrated the company's software technology codenamed Maui. EMC also had a relationship with clustered NAS software provider IBRIX, which was acquired by HP in July 2009.

As for Atmos, EMC notes that the product is focused on different market industries such as Web 2.0/Internet, government, healthcare, service providers, and media. Atmos does support NAS connectivity (CIFS/NFS); however, this is not a clustered NAS architecture, according to Stifel Nicolaus.

EMC took aim at Big Data in recent months when it launched the EMC Greenplum Data Computing Appliance, the result of the acquisition of Greenplum earlier this year.

The Greenplum Data Computing Appliance was built using Greenplum Database 4.0 and touts a “parallel-everything” architecture that can deliver data loading performance of 10TB per hour, according to the company.

The Data Computing Appliance integrates database, compute, storage and network into a single system, and is available in half-rack, full-rack, and multiple-rack appliance configurations for terabyte to petabyte-scale deployments.

The acquisition of Isilon is EMC’s second in as many weeks. Last week, the company announced the acquisition of privately held, Bedford, Mass.-based Bus-Tech, Inc., a maker of virtual tape library (VTL) technology for mainframe environments. The financial terms of the deal were not disclosed.

Bus-Tech’s mainframe virtual tape library controllers use open systems disk storage to store and retrieve mainframe tape data. As a long time member of EMC’s Select Partner Program, Bus-Tech’s products have been used to connect EMC’s backup offerings to the mainframe for batch processing, backup and recovery, disaster recovery, and data archiving applications.

In conjunction with the acquisition of Isilon, EMC has reaffirmed its previously issued business outlook for 2010. For 2010, EMC expects consolidated revenues of $16.9 billion, $0.91 in consolidated GAAP diluted earnings per share, and $1.25 in consolidated non-GAAP diluted earnings per share, which excludes the impact of restructuring and acquisition-related charges, stock-based compensation expense, and intangible asset amortization. For 2010, consolidated restructuring and acquisition-related charges, stock-based compensation expense, and intangible asset amortization are expected to be $0.02, $0.23 and $0.09 per diluted share, respectively.

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