Update Since this report was filed, EMC announced that it was buying Isilon for $2.25bn.

The New York Post is reporting that EMC has agreed to buy Isilon after weekend talks moved the parties past a price-difference roadblock.

It had been reported that Isilon's self valuation was too high for EMC, and CEO Joe Tucci said he would walk away from the deal.

To recap, Isilon offers clustered and scale-out file access storage that does far more for customers in rich media, oil and gas, pharmaceutical and other markets than EMC's Celerra filers can do. There is a presumption by BlueArc, Isilon, Panasas, DataDirect and other suppliers into such high performance markets that their systems are different in kind from mainstream clustered filers such as NetApp's FAS series. NetApp would disagree of course.

The popularity of specialised high scale-out clustered filers or object stores has reached such a pitch that mainstream system and storage suppliers now see a need to embrace this niche because it is becoming mainstream. IBM has introduced its SONAS products, HP bought Ibrix and Dell scooped up the assets of Exanet, and HDS has a partnership with BlueArc, leaving EMC out in the cold.

That's the logic behind the deal as seen from outside EMC. The speculation is that a deal could be announced later today. An EMC source has confirmed that the deal is going ahead. The price is said to be $2.3bn. ®