EMC today moved to fill the hole in their portfolio in scale out file storage (and limited success in NAS in general) with the acquisition of Isilon, for a cool $2.25 billion. Looks like the HP helped set the going price for the few remaining independent storage vendors on the scene when they spent around $2.5B on 3PAR earlier this year. Isilon, similar to 3PAR, has about 1,500 customers and around $150MM revenue, so this is an acquisition based on technology and future growth potential, more than market share. 

File data is often estimated as the fastest-growing data type and is also unpredictable in its growth patterns. Isilon’s technology uses a scale-out architecture that fits the behavior pattern of big users of file data.  You can start small, with a cluster of a few nodes, and then grow over time — and you aren’t locked in to a given level of performance — you can deploy nodes with different performance and density profiles. This flexibility, combined with extremely easy management and refreshes without complex data migration or downtime, makes for a powerful combination. EMC will take a big step up from their current offerings with the addition of the Isilon technology, probably the best option from an independent vendor today.

From a competitive standpoint, all vendors have file solutions, but NetApp is the main competitor of Isilon and EMC in the space. NetApp has gained ground against EMC in the last few years with its unified offerings that combine block and file storage in highly automated, feature-rich systems.  However, the merging of NetApp’s scale out GX operating system, acquired with Spinnaker in 2003, has proved to be a hard task, and customers still have to choose massive scale or advanced features. The EMC deal with Isilon puts more pressure on NetApp to deliver their converged vision. Other vendors that have invested in big-scale NAS systems, Dell with Exanet, HP with IBRIX, IBM with SOFS, HDS with BlueArc, will also see more pressure to define and differentiate their offerings against the EMC juggernaut. Independent scale-out NAS vendors remaining include Panasas, BlueArc (with a partial investment from HDS), and DDN.

EMC runs some risk here with integration — they currently have a broad range of storage hardware and software products, many of which came from acquisition, and they don’t fit together that well. Adding another silo, no matter how technologically advanced, may be an issue. Being clear about where it fits in the lineup, extending visibility of IONIX and capability of EMC replication tools to Isilon products will be critical to smooth down the rough edges. A great deal of Isilon’s value is in use of commodity server nodes with cache coherency and high-speed interconnect, so don’t expect an Isilon gateway option in front of Clariion or VMAX any time soon.  Long term, file storage is in flux, with object and cloud options potentially moving users away from traditional NAS deployments.  However, these shifts are just starting to be defined, and will take time to develop.  In the case of the cloud, there has to be capacity somewhere, and Isilon is already in use as  a service provider back end, so this could turned to EMC’s advantage if they are nimble.