VMware and EMC plan to form a new cloud services business within the EMC Federation, by merging their cloud capabilities with Virtustream's current cloud offerings, under the Virtustream brand.
The EMC Federation is made up of six independently-run businesses ? EMC II, Pivotal, RSA, VCE, Virtustream and VMware ? that operate as one giant company.
Virtustream will be jointly owned by VMware and EMC, and led by Rodney Rogers, Virtustream's CEO.
Says Rogers: "Our vision of combining our IP [intellectual property] and collective cloud platform and services capabilities for mission-critical applications, backed by the strength and reach of EMC and VMware, will deliver an enterprise-focused hybrid cloud solution that is unrivalled in the market.
"We expect Virtustream will become one of the top five service providers globally and are thrilled about what this means to all of our customers, partners, and the federation moving forward."
A definitive agreement for the transaction is being finalised by the parties, and Virtustream's financial results will be consolidated into VMware's financial statements as of Q1 2016.
Combining capabilities
The business will unite the cloud capabilities of EMC Information Infrastructure, VCE, Virtustream and VMware, to provide an array of on- and off-premises offerings. These will include VMware vCloud Air, VCE Cloud Managed Services, Virtustream's Infrastructure-as-a-Service, and EMC's Storage Managed Services and Object Storage Services offerings.
It will integrate these solutions to provide customers with a unified infrastructure-as-a-service offering, built to support the entire spectrum of business workloads. The company will integrate and extend existing on-premises EMC Federation private cloud deployments into the public cloud, maintaining a common experience for developers, managers, architects and end-users.
Virtustream's cloud services will be delivered directly to customers and through partners, and is expected to generate many hundreds of millions of dollars in recurring revenue in 2016, focused on enterprise-centric cloud services, with an outlook to grow to a multi-billion business over the next several years, says EMC.
Local perspective
According to Ian Jansen van Rensburg, systems engineering manager, Southern Africa, at VMware, the new Virtustream business will feature the industry's broadest portfolio of hybrid cloud offerings. It will enable customers to move all their applications to cloud-based IT environments and seamlessly manage their on-premises and off-premises environments, he explains.
"Locally, as many companies are still negotiating their cloud roadmap, we see tremendous growth opportunities for VMware and EMC with the new Virtustream business, building on the strong momentum of vCloud Air, and building on our capabilities of being able to deliver infrastructure solutions that help customers drive their roadmap to the cloud," Jansen van Rensburg adds.
Market changes
EMC says Virtustream aims to be a leader in hybrid cloud, one of the largest markets for IT infrastructure spending. It will provide a complete spectrum of managed services for on-premises infrastructure and its enterprise-class infrastructure-as-a-service platform, enabling customers to move all their applications, including mission-critical applications, to cloud-based IT environments.
Joe Tucci, EMC chairman and CEO, says through Virtustream, EMC is addressing the changes in buying patterns and IT cloud operation models that it is seeing in the market.
"Our customers consistently tell us that they are focused on their IT transformations and journeys to the hybrid cloud. The EMC Federation is now positioned as a complete provider of hybrid cloud offerings."
In addition, VMware will establish a Cloud Provider Software business unit led by Ajay Patel, VMware senior vice-president, focused on delivering cloud software and solutions to cloud providers.
The business will incorporate assets and people from the VMware vCloud Air Application Services business, vCloud Director and vCloud Air Network teams, as well as Virtustream's Software Business, including Advisor Planning and Migration tool, xStream cloud management platform and Viewtrust governance, risk and compliance solution.
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