Isilon plays in the scale-out network attached storage (NAS) segment, which IDC projects will grow 36% per year, reaching an estimated $6 billion in 2014.
EMC plans to merge Isilon with its Atmos unit and compete in the Big Data market, which is a term used to describe the massive amount of data produced by the new generation of computer applications, the company said.
Some are questioning the high price EMC is paying for Isilon. The $33.85 a share price tag is a close to a 29% premium over Isilon’s Friday closing price and nine times its estimated revenue in 2011, according to Kaushik Roy, a Wedbush Morgan Securities analyst.
“I guess this is the new normal,” Roy told the New York Times in a phone interview. “It’s a little irritating that it’s a pricey deal, but it’s more of a strategic deal – EMC wanted to take it off the market.”
This latest acquisition reflects a consolidation trend in the data storage market, the newspaper noted, a trend that has seen a long list of companies recently acquired for a pricey sum: 3Par, Data Domain, ONStor, and Netezza, to name just a few.
The latest transaction, EMC’s buy of Isilon, is expected to be completed later this year.