Isilon Went Through Some Pain to Get Here
Like many startups-even in the fast-growing storage sector-Isilon
had to go through some financial pain before finally getting into the black
Isilon, which went public in 2007, had reported that its revenue for the third quarter ended Sept. 30 was $53.8 million, up 19 percent sequentially over $45.1 million in Q2 2010. More significantly, revenue was up a whopping 77 percent from $30.5 million in the third quarter of 2009.
Isilon's margins have been excellent at 60 percent and above, but R&D and operating expenses have been high, and the company had trouble getting out of the red for a couple of years.
However, the good news for Isilon in Q3 2010 was that its net income was $4 million, compared with a net loss a year ago of $4.9 million. This undoubtedly was a major factor that led to the eventual acquisition.
Pund-IT storage analyst Charles King told eWEEK he believes there are important synergies between EMC and Isilon.
"There are also obvious synergies between Isilon and EMC's Atmos cloud platform/service. In fact, we expect the company believes the pair will provide the 'glue' for seamlessly binding together customers' private cloud storage assets and those secured by public cloud service providers, and also complement the cloud strategies of EMC partners such as Cisco and VMware," King said.
"Isilon's NAS expertise and innovative technologies should prove to be valuable resources for the development of next-generation EMC NAS solutions, thus allowing the company to compete more effectively against NetApp and other NAS players," he said.
Overall, King said he considers EMC and Isilon to be an "excellent fit."
"The pair appears well-suited strategically, and both companies' individual products and broader strategies offer multiple leverage points," King said. "EMC's size, experience, resources market penetration and industry leadership will offer the dynamic yet still immature Isilon what it needs to get to the next level."
NetApp, EMC's largest independent storage competitor, had a few things to say about the acquisition.
"NetApp is already capitalizing on the trend towards virtualized environments, cloud services and big data with nearly a decade of investment fueling its continued market share gains," Chris Cummings, NetApp Vice President of Product and Solutions Marketing, wrote in an email to eWEEK.
"Today's multi-billion dollar acquisition of Isilon is further proof that EMC is still searching for ways to catch up to the critical changes shaping the IT industry."
Editor's note: This story was updated at 2:38 p.m. Pacific time to add reaction from an analyst and from NetApp.