By Alexander Moschina
On November 15, mid-cap Seattle tech firm, Isilon Systems (Nasdaq: ISLN) received a $2.25 billion takeover offer from EMC Corporation (NYSE: EMC). The deal values Isilon at $33.85 per share – a 29% premium over its closing price prior to the announcement.
And it’s a small price to pay, too, given that the world’s largest data storage provider is now positioned to take an even bigger bite out of the multibillion-dollar market…
EMC Leads the $16.7 Billion “Cloud Computing” Sector
Based in Hopkinton, Massachusetts, EMC has been a leader in the computer storage industry since 1979. Today, it boasts a 20% market share and a market cap of $47.3 billion. Even during the past two rocky years, the company’s shares have rocketed more than 107% higher.
That’s because EMC is at the forefront of “cloud-computing.” What’s that? Simply put, over the next decade, businesses will create massive amounts of data. And the old storage methods simply won’t be able to hold it all.
Enter cloud computing – a web-based storage option that is exploding worldwide. By 2013, this niche market is expected to reach $16.7 billion. To put that in perspective, the entire industry was worth only $6.6 billion just two years ago.
And thanks to EMC’s buyout of Isilon, it has an even greater slice of the pie. As President Pat Gelsinger says, “EMC will invest in all aspects of Isilon’s business to accelerate growth and take advantage of the fast-growing market opportunity ahead.” And speaking of those opportunities…
EMC and Isilon Predict Profitability Will Triple by 2012
Isilon gives EMC a spot in the “Scale-out NAS” segment – one of the fastest-growing areas of the cloud computing industry. On its own, this will be a $6 billion market by 2014.
In addition, demand for Isilon’s “Big Data” solutions is already growing 36% annually. This, combined with EMC’s existing product lines, means the firms expect to triple their combined profit growth by the second half of 2012.
And EMC isn’t stopping there either. Expanding new product lines is priority #1 – a focus that will help solidify EMC’s position as a cloud-computing industry leader as the sector matures over the next 10 years. It already has a solid foundation, but the addition of Isilon should really give this company wings.
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