Why EMC bought Isilon for $2.25 Billion

EMC Corp. (s EMC) said today it will acquire scale-out storage provider Isilon Systems (s isln) in an all-cash deal worth $2.25 billion. The deal is another of several high-profile acquisitions and fundings in the scale-out storage space as companies try to handle the data created by more and more online activity and the availability of computing power to actually do something with that data. EMC said it will combine Isilon’s appliance with its Atmos file-based storage system and appliance for dealing with big data at huge scale. EMC expects revenue from the combined Atmos and Isilon products to reach a $1 billion run-rate during second half of 2012.

The Isilon deal brings EMC more storage gear at the commodity end, as opposed to HP’s (s hpq) recent bidding war and buy for 3Par (s par), which deals with block-based storage used in highly virtualized enterprise environments. Isilon, however, does primarily file-based storage, which is more difficult to easily integrate with virtualized environments. However, file-based storage is great for storing large quantities of content — such as video files — fairly cheaply, and there’s a huge market for that as more and more information ends up online. With HP buying Ibrix, Dell (s dell) buying Exanet and NetApp (s ntap) buying Bycast, EMC likely felt the pressure to make a move.

Storage isn’t something many people think about, but it’s a competitive space that only continues to gain relevance as we spend more and more time both consuming and creating digital information.

Related Content from GigaOM Pro (subscription required)