Data storage company EMC Corp. (EMC) said it agreed to buy Isilon Systems, Inc. (ISLN) for $33.85 a share in cash, to cope with the unmistakable waves of cloud computing and massive amount of data produced by a new generation of applications in markets.

In addition, EMC said it reaffirmed its fiscal 2010 adjusted earnings outlook of $1.25 a share, and its revenue forecast of $16.9 billion. Analysts expect profit of $1.25 a share on revenue of $16.90 billion.

The company expects consolidated restructing and acquisition-related charges for 2010 of 2 cents a share, stock-based compensation expense of 23 cents a share and intangible asset amortization of 9 cents a share.

Customers are looking for new ways to store, protect, secure and add intelligence to the vast amounts of information they will accumulate over the next decade. EMC, in combination with Isilon, sits at the intersection of these trends with leading products, solutions and services to help customers get the absolute most out of what cloud computing has to offer, said Joe Tucci, Chief Executive of EMC.

EMC will pay $33.85 a share in cash in exchange for each share of Isilon for an aggregate purchase price of about $2.25 billion, net of Isilon's existing cash balance. EMC expects the combined revenue of the two highly complementary storage offerings, EMC's Atmos and Isilon's solutions, to reach a $1 billion run-rate during the second half of 2012.

The acquisition of Isilon, which is expected to be completed late this year, is not expected to have a material impact to EMC's full-year 2010 GAAP and adjusted earnings, while is expected to be accretive to EMC's 2011 adjusted profit per share.

Isilon will enable EMC to accelerate our storage revenue growth and serve our customers across a broader range of the storage systems market. EMC will invest in all aspects of Isilon's business to accelerate growth and take advantage of the fast-growing market opportunity ahead, said Pat Gelsinger, President and COO, EMC Information Infrastructure Products.

Isilon is known as the leader and momentum player in the fast-growing 'scale-out NAS (network attached storage)' segment, which IDC projects will grow on average about 36 percent annually reaching an estimated $6 billion dollars in 2014.

After the acquisition is complete, EMC's Atmos and Isilon's solutions will be offered to customers with a complete storage infrastructure solution for managing 'Big Data' in private or public cloud environments.

Isilon's scale-out NAS systems are designed to begin small and scale quickly and non-disruptively up to 10 petabytes in size, with extremely high levels of performance and availability.

EMC Atmos object storage provides the perfect complement to Isilon for massive globally distributed environments and object access to data for usages like Web 2.0 applications.

EMC's adjusted earnings during the latest third quarter were $649.4 million or 30 cents a share, up from $480.3 million or 23 cents a share last year. Revenue grew to $4.21 billion from $3.52 billion. Cash and cash equivalents at the end of September 30, 2010 were $4.94 billion.

Isilon's adjusted profit during the latest third quarter was $6.9 million or 9 cents a share, compared to a loss of $1.4 million or 2 cents a share last year. Total revenue rose to $53.8 million from $30.5 million. Cash and cash equivalents at the end of September 30, 2010 were $19.84 million.

Recently, EMC said it has acquired Bedford, Massachusetts-based Bus-Tech Inc., a privately held provider of VTL (Virtual Tape Library) solutions that utilize open systems disk storage to store and retrieve mainframe tape data. The acquisition is not expected to have a material impact to EMC GAAP and non-GAAP EPS for the fiscal 2010.

EMC shares were trading down 0.55 percent at $21.60 in the pre-market session on NYSE, while Isilon shares gained 29.44 percent to $34.03 on the NASDAQ stock market.