EMC Expands Cloud Capabilities with $1.2 Billion Virtustream Acquisition

EMC, which enables businesses and service providers to transform their operations and deliver IT as a service, is acquiring Virtustream to form its new managed cloud services business.

The all-cash transaction is expected to close in the third quarter of 2015, subject to customary closing conditions, is valued at approximately $1.2 billion, and has been approved by the boards of directors of both EMC and Virtustream and the requisite Virtustream stockholders. According to the company, the acquisition represents a new stage in EMC’s strategy to help customers move all applications to cloud-based IT environments.               

“Everyone in the EMC family is thrilled about this acquisition,” said Joe Tucci, EMC chairman and CEO, during a webcast announcing the acquisition. “Virtustream will be a valuable resource to the EMC family.”

Currently, EMC provides the Federation Enterprise Hybrid Cloud Solution — an on-premise private cloud offering that provides on-ramps to public cloud services such as VMware vCloud Air.

Virtustream brings to the EMC portfolio a managed cloud software and services capability — whether on or off premise — which EMC also intends to incorporate into the Federation Enterprise Hybrid Cloud Solution. With the addition of Virtustream, EMC will enable customers to move their entire application portfolio into a cloud environment.

Virtustream migrates, runs and manages mission-critical applications in the cloud, including SAP.  “This [deal] will elevate our SAP capabilities,” Tucci said. According to Virtustream CEO Rodney Rogers, who will report to Tucci and continue to manage its solutions, Virtustream has a close relationship with SAP that will continue to grow with this partnership.

“The nature of our technology allows us to do things unique in running SAP and SAP HANA environments in an efficient manner,” Rogers said. “We enjoy a close relationship that we believe will strengthen further.”

Virtustream customers include marquis enterprises such as The Coca-Cola Company, Domino Sugar, Heinz, Hess Corporation, Kawasaki, Lexmark, Scotts Miracle-Gro and a global footprint of service provider partners who use Virtustream software to power their cloud offerings.

“We are most proud about our customers who have placed their faith in us as young innovators in the [cloud] space,” Rogers said. “This deal gives us the ability to expand the depth and breadth of our capabilities. Fortune 500 is a place where it’s difficult to offer single point services.”

Virtustream’s cloud software and infrastructure as a service portfolio will be delivered directly to customers and through its partners. EMC Federation service provider partners will receive access to Virtustream’s xStream cloud management software platform and be enabled to adopt and deliver their own branded services based upon it.

For more information about the acquisition, click here