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EMC plots managed cloud push with $1.2bn deal to acquire Virtustream

Storage giant claims latest purchase will reinforce its hybrid cloud proposition for enterprises

EMC is plotting a move into the managed cloud services space by agreeing to acquire enterprise-focused service provider Virtustream for $1.2bn.

Privately held Virtustream specialises in the provision of infrastructure-as-a-service (IaaS) to enterprises and public sector organisations, as well as automation and cloud management tools to help make it easier for users to manage their applications in the off-premise world.

Its flagship offering is a cloud management product called xStream, which is used to operate its own IaaS portfolio, and also sold to service providers and enterprises to control their private cloud environments.

The deal is expected to close in the third quarter of 2015 and has already met the approval of the boards of both firms, and their stockholders.

Once complete, the storage giant confirmed Virtustream will form the basis of its soon-to-be-created managed cloud services business, and add further capabilities to its Enterprise Hybrid Cloud Solution.

The latter is an on-premise private cloud offering that allows users to connect to public cloud services and take advantage of the hybrid IT delivery model.

With Virtustream’s technology incorporated into the set-up, EMC claims it will then be able to move an enterprise’s entire portfolio of applications into the cloud.

Joining the federation

EMC has been on a mission of late to emphasise the wide and growing range of business that make up the company, which include VMware, RSA, Pivotal, VCE and now Virtustream, and the individual technologies these units produce can collectively help enterprises move to the cloud.

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EMC chairman and CEO Joe Tucci referenced this point in a statement announcing the deal, by talking up the benefits of welcoming Virtustream into its “federation” of companies.

“With Virtustream in place, EMC will be uniquely positioned as a single source for our customers’ entire hybrid cloud infrastructure and service needs,” he said.

“We could not be more delighted that Virtustream will be joining the EMC Federation family. It’s a game-changer.”

In a separate blog post, Virtustream CEO Rodney Rogers revealed EMC emerged as a potential suitor while the company was laying the groundwork for an initial public offering later in 2015.

“We believe that we will help fulfil the EMC vision of being able to run any type of enterprise application in the cloud, anywhere in the world, through ultimately whatever method of consumption makes sense for the customer,” he said.

“EMC’s reach, sales force, commercial model and asset base will give us the opportunity to take this precious kernel of intellectual property we have developed and reach the world with it.”

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