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EMC Acquires Virtustream for $1.2 Billion in Enterprise Cloud App Push

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EMC, the market-leading Hopkinton, Mass. provider of enterprise data storage systems, announced today that it is acquiring cloud infrastructure as a service (IaaS) specialist Virtustream in a transaction valued at $1.2 billion.

Virtustream’s cloud management software platform for private, public, and hybrid clouds, enables businesses to run, manage and migrate their applications in the cloud. Offering a mix of resource optimization and management, along with infrastructure orchestration, automation, security and compliance features, xStream allows organizations to cloudify their mission-critical apps, a capability enterprises are increasingly seeking out, according to EMC CEO Joe Tucci.

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“Our customers are rapidly moving to cloud computing,” said Tucci during a conference call discussing the deal earlier today. In addition, they are “demanding managed cloud options for both on and off-premise” enterprise-grade workloads, he continued.

xStream features seamless integration with VMware, also an EMC property, and supports major enterprise application ecosystems including SAP, a Virtustream partner and investor. “SAP is one of our most important and strategic partnerships,” noted Tucci. He expects the deal to close in the third quarter of 2015.

Describing Virtustream as a “game changer,” Tucci said in a statement that in the wake of the buy, “EMC will be uniquely positioned as a single source for our customers’ entire hybrid cloud infrastructure and services needs. We could not be more delighted that Virtustream will be joining the EMC Federation family.”

Comprised of technologies from EMC II, Pivotal, RSA, VCE and VMware, EMC Federation is a set of aligned solutions that draws on those business units to help businesses make the shift to cloud-friendly, software-defined IT infrastructures.

“We’re a firm believer that you can run any application on the cloud,” said Rodney Rogers, CEO and cofounder of Virtustream during the call. In particular, he noted that his company’s technology makes it possible to run “SAP and SAP Hana-type environments in an extremely efficient manner.”

Virtustream’s customer roster includes The Coca-Cola Company, Hess Corporation, Kawasaki and Lexmark, among other major brands. Under EMC, Rodney Rogers will remain with the unit and report directly Joe Tucci.

The deal came after Virtustream embarked on a year-long process to complete its initial public offering (IPO). Suggesting the company was well on its way to a Wall Street debut, including staging “mock earnings calls” ahead of a looming IPO, a number of suitors emerged, admitted Rogers. EMC won out due to a technology portfolio that complements and accelerates Virtustream’s vision of empowering large enterprises to run and manage their application environments on the cloud, he added.

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.

Photo courtesy of Shutterstock.

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