ScaleIO, an Israeli startup, has been purchased by EMC for a reported $200-$300 million. ScaleIO, a growing leader in enterprise data and elastic storage, being bought by EMC, one of the enterprise data giants, makes sense.

What ScaleIO lacked in marketing for such a young start-up, it sure made up with software. Its flagship product is a scale-out storage system that replaces regular SAN with a virtual parallel that runs on local disks rather than more expansive, external storage. Make no bones about it, ScaleIO’s system took a shot at the core business of storage giants like EMC or IBM. By confining the SAN to the application server, the company says it can cut storage costs by 80 percent and deliver direct savings of up to 28 percent. The technology has been implemented by the likes of SAP, Check Point and Colt.

If you can’t beat them…buy them…right?

Earlier today on SiliconANGLE’s NewsDesk, Wikibon Senior Analyst Stu Miniman shared his thoughts on the reported ScaleIO acquisition by EMC:

“All of the big storage companies need to get their software-defined or software-led storage portfolio in order because we think that is the way much of storage is going. Software needs to add that value and storage companies need to make sure they are not clinging too hard to their hardware.”

ScaleIO fills a software gap for EMC, bolstering its storage solution for service providers. The ScaleIO buy most likely has AWS in mind, a growing rival in the enterprise space.

“One of the things I’ve heard is it positions against Amazon’s Elastic Block Storage (EBS), and ScaleIO there’s is the ECS solution,” Miniman says. “It was a hole in EMC’s portfolio if you look at how service providers can build solutions off of EMC technology that this could help fill.”

ScaleIO’s Co-Founder + CTO Erez Webman formerly of XtremIO, and the rest of the founders are a who’s who of the data storage industry. While ScaleIO was founded in early 2011, it’s only been out of stealth for only six months. It came out of stealth back in December when it landed a $12 million investment led by Greylock and Norwest Venture Partners. I know most of us are pretty good at math, so a $200-$300 million sale would be a pretty good return.

When they came out of stealth six months ago, it was just another domino to fall in the software-defined storage camp, and is one heck of a poster child. “Software-defined storage enables IT organizations to break out of the traditional SAN model that requires a staff of minions to perform mundane storage tasks,” commented Matthew Brisse, storage research director at Gartner last December.

Let’s look at three recent storage-related purchases by EMC:

• Isilon in 2010 for $2.5 billion, network storage system
• XtremIO in 2012 for $430 million, flash storage
• ScaleIO this week for $200-$200 million, elastic converged storage

The writing is on the wall folks. The cost of hosting continues to drop. The quality, speed and elasticity of cloud computing continues improve. Small and medium-sized businesses are moving to cloud hosting infrastructures (AWS, GCE, IBM, etc.) faster than Justin Bieber tickets sell out in the 8-16 female demographic. While larger companies aren’t as fast to move, because of the disruption in the market by more nimble firms, they are increasingly consolidating their own clouds into massive data centers, enhanced with layers of software and analytics.