EMC is making its Isilon OneFS 7.0 operating system, code-named “Mavericks,” generally available Friday. Previewed at EMC World in May, OneFS 7.0 has data protection, performance, security and interoperability features more suited to mainstream NAS products than the traditional clustered NAS Isilon capabilities.

Isilon is used largely in media and entertainment, life sciences, oil and gas exploration, healthcare and other high-performance applications. Sam Grocott, VP of marketing for EMC Isilon, said the large capacity files used in those industries now increasingly show up in enterprises.

“Isilon has been used in a world of massive capacity and extreme I/O performance environments that can grow quickly,” Grocott said. “Now we’re seeing those types of data sets show up in enterprise data centers. For instance, we’ve seen much more rapid adoption of enterprise customers dealing with extremely large home directories. We’re seeing up to hundreds of terabytes for a home directory.”

EMC claims the new OneFS version increases single file system throughput by 25% over the former version and new caching capabilities reduce latency by up to 50%. OneFS 7.0 reduces latency by giving each storage node its own nonvolatile random access memory (NVRAM) with cache built in, mirroring writes to cache to other nodes’ caches via InfiniBand across clusters, and confirming the write after the mirror. Previous versions of OneFS would write data to disk after caching it before confirming the write was complete.

Data protection improvements include the ability to use an active snapshot as a writeable snapshot, so a snap no longer has to be copied into an active file system to replace a lost file. Copying the snap could require a lengthy wait in a big data environment. EMC also added one-click failover and fail back to Isilon’s SyncIQ replication software for disaster recovery.

New security features include compliance with SEC 17a-4 requirements for tamper-proof data protection, roles-based administration to prevent unauthorized change to files, and the creation of isolated storage pools with authentication zones.

“We’re not physically creating separate storage silos, but we are logically separating access and directories,” Grocott said of the authentication zones. “Service providers are big proponents of this.”

Interoperability improvements include a REST-based API for third-party vendors to write to, and support for VMware vStorage APIs for Array Integration (VAAI) and vStorage APIs for Storage Awareness (VASA).

While casting Isilon as a more mainstream storage system, EMC is stopping short of pushing its iSCSI support for block storage. The midrange VNX platform is EMC’s main unified storage product, even though Isilon does support iSCSI.

“The way customers use our storage, it’s predominantly file today and will continue to be that way,” Grocott said. “We’re going to be focusing on file-based storage.”

In the press release announcing the deal, EMC categorized Isilon and its Atmos object-storage platform as complementary platforms for managing “Big Data” in private and public clouds, and said the combined revenue will reach a $1 billion run rate by the second half of 2012.

EMC definite “Big Data” as “a term used to describe the massive amount of data produced by a new generation of applications in markets such as life sciences (e.g. gene sequencing), media and entertainment (e.g. online streaming), and oil and gas (e.g. seismic interpretation) to name a few.”

EMC clearly sees Isilon’s products as a different category than its Celerra platform, which supports mainstream NAS as well as iSCSI storage.

EMC said both companies’ boards have approved the deal, and it expects the acquistion to close by the end of the year.

EMC will pay $33.85 per share for Isilon stock, which is a 29% premium to Isilon’s Friday closing price of $26.29. That’s a high price, considering Isilon was barely profitable. Isilon reported $4 million in net income on $53.8 million in revenue last quarter, its most profitable ever. The $2.25 billion price tag suggests there may have been another suitor for Isilon, as was the case when Hewlett-Packard acquired 3PAR in September for $2.35 billion after winning a bidding war with Dell. The usual suspects — Cisco, Dell, HP, IBM, NetApp and Oracle – have all been mentioned in analyst reports as possible suitors for Isilon.

Perhaps anticipating claims that EMC overpaid for Isilon, EMC spokesman Michael Gallant included a reminder of EMC’s acquisition track record in the e-mailed press release on the Isilon deal.

“EMC has a long and highly successful track record of acquiring, integrating and growing leading IT companies, like Isilon (think Data Domain, VMware, Avamar, etc.),” Gallant wrote. “Since 2003, EMC has also invested more than $13 billion on more than 50 strategic acquisitions.”

Check SearchStorage.com later today for more on this acquisition.

The New York Post last Friday reported EMC is in exclusive talks to buy Isilon for more than $2 billion. I don’t know about the exclusive and $2 billion parts, but it’s likely that EMC is interested in Isilon. So are other storage vendors, mainly because EMC and others have failed to either develop their own clustered NAS or successfully integrate the technology after acquiring it from others.

EMC took a shot with its Hulk and Maui projects, which turned into its Atmos cloud platform but not the type of scale-out NAS system that media and Web companies crave for their storage needs. NetApp acquired Spinnaker in 2003 and still hasn’t fully integrated its clustered IP into the DataOntap operating system. IBM created its own, brining out SONAS last February. It’s too early to say if that product is a success, but it figures prominently whenever IBM presents its storage roadmap. HP acquired PolyServe in 2007and when that didn’t work out, it bought Ibrix last year. HP also talks up its XP9000 platform based on Ibrix a lot these days. Dell acquired the IP of Exanet earlier this year, and plans to use it for clustered NAS and multiprotocol storage in combination with EqualLogic but has yet to bring it to market.

In a research note today, RBC Capital Markets analyst Amit Daryanani, suggested that much of the interest in Isilon could be defensive. In other words, vendors want to keep their rivals from buying it.

“We suspect EMC would be the most likely acquirer, as it lacks a storage platform with a single management platform and its Celerra-NAS platform doesn’t scale as efficiently as Isilon,” Daryanani wrote. “Plus, the harm this could do to NetApp would make the deal even more appealing.”

As for NetApp, he wrote: “We would not be shocked to see NetApp interested in acquiring Isilon as a defensive move to keep its unified storage advantage versus EMC. Also, an Isilon acquisition by any of the other suitors would harm NetApp’s revenue stream.”

Daryanani also mentioned Cisco, Dell, HP, IBM, and Oracle as possibilities but admitted Cisco and Oracle were unlikely to make a bid.

The feeling here is that HP and IBM are willing to go with their relatively new scale-out products rather than throw money at another option. NetApp probably won’t get into another bidding war with EMC after losing out for Data Domain last year. Dell might find integrating Exanet more difficult than originally anticipated, but Isilon’s technology is proprietary and does not work with other vendors’ storage. That would make it even tougher to integrate with EqualLogic.

That leaves EMC, which could position Isilon at its clustered NAS for high performance, rich media and web customers while clearing the way to consolidate its current Celerra NAS with its Clariion SAN platform.

One thing is clear: Whoever buys Isilon will be overpaying. That’s because any large vendor could have picked it up for a lot less money a couple of years ago instead of exploring other options.