Editor's note: An original version of this article referred to DataDirect as a subsidiary of Progress Software. While Progress Software does have a DataDirect subsidiary, the article was referring to another private company named DataDirect Networks.

Last Monday, I wondered out loud whether Isilon Systems (Nasdaq: ISLN) would ever find a buyer. Today, the networked storage specialist and EMC (NYSE: EMC) have put out the official word: For $33.85 per Isilon share in cold, hard cash, the company will soon become a division of EMC.

That was fast.

The $2.25 billion purchase price, net of Isilon's cash balance, represents a 29% premium over last Friday's closing price and is 12.5% above the rumored $2 billion deal. Isilon is not expected to affect EMC's earnings in 2010, but should start adding to the bottom line in 2011, assuming that all the usual regulatory approvals and Isilon's shareholder vote on the combination turn out as planned. According to EMC spokesman Michael Gallant, Isilon plus EMC's own Atmos object store should combine to capture $1 billion of revenue by 2012. For context, Isilon's trailing sales stand at about $175 million today.

The "scale-out NAS" area where Isilon plies its trade is a very active battleground. Isilon and DataDirect Networks are among the leaders of this highly specialized market, where clustered storage systems give tightly managed access to "unstructured data" like videos and other media. Both have impressive customer and partner lists, and DataDirect even provides scale-out NAS software for enterprise computing giants IBM (NYSE: IBM) and Hewlett-Packard (NYSE: HPQ).

This is a field where NetApp (Nasdaq: NTAP) made an aggressive entry with its purchase of Spinnaker and HP bought IBRIX to get more skin in the "scale out game," but EMC has lagged behind. So it's not surprising to see the company make a play on the market leader.

I still don't expect a bidding war to break out over Isilon, despite this form offer and the tough-to-reproduce technology on the table. The company is just too small and requires too much nurturing to justify these lofty prices, even for a company with the resources of EMC or Big Blue. Gallant tells me one of the main selling points is that "Isilon has great products and a solid management team up and down the ranks." Even so, the Isilon-EMC combination needs to cook up some great pudding together because that's where the proof is.

Investors shrugged collectively at the announcement, hardly moving EMC shares at all. That's despite EMC also taking this opportunity to reaffirm its guidance for the fourth quarter and full year, contradicting doom-and-gloom reports by Cisco Systems (Nasdaq: CSCO) and others. Then again, EMC's shares have risen by 16% over the past three months, and it's actually hard to find a storage vendor that didn't crush the market recently. The storage market is red hot, and a lot of good news has already been priced into EMC's shares.

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