EMC to acquire server storage software firm ScaleIO

The data storage and virtualization giant will buy Israeli storage startup ScaleIO. Rumors spun that EMC churned out $200 million for the firm, but the terms of the deal were not disclosed.

EMC is throwing its weight behind ScaleIO by signing a definitive agreement to buy the firm for an undisclosed amount, it was announced on Thursday.

Terms of the deal were not disclosed, but Israeli business site Calcalist said in June that EMC could be paying as much as $200-300 million for the server storage software company.

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This will be EMC's second acquisition in Israel over the past year. EMC bought flash storage firm ExtremeIO for $430 million in May 2012.

Privately-held ScaleIO's server-side storage software will help bolster EMC's flash portfolio by combining highly-scalable server software with EMC's own hardware. ScaleIO's software-only approach helps enterprises create a virtual pool of server-based storage by connecting and combining resources from solid-state drives, PCIe flash cards and traditional hard drives.

EMC plans to wedge ScaleIO into its Flash Product Division, which will help the company strengthen its flagship Elastric Converged Storage (ECS) software.

ECS is a software-based technology that allows users to connect storage on an array of application servers to create a single virtual storage area network. ECS is enterprise-class: it supports thousands of servers and doesn't bat an eyelid at sudden changes in infrastructure. It helps to rebalance data across servers by finding free capacity and turning it into a single virtual storage area network (SAN).

EMC has previously said its ECS technology enables datacenters to cut storage costs by more than 80 percent, which can help an organization's IT budget find savings of more than one-quarter.

The all-cash transaction is not expected to have any material impact on EMC's 2013 earnings.