VMWare and EMC launch VirtuStream to Sell the Cloud

VMWare and EMC have announced that they will combine their cloud offerings into a new cloud services business. VMWare stocks dropped nearly 20% after EMC said it forming a jointly-owned company named Virtustream. EMC had bought Virtustream for $1.2 Billion.

After Dell announced that it would acquire EMC for $67 Billion, it was decided that the newly formed Virtustream will have a 50% stake by both companies. Virtustream retains its CEO, Rodney Rogers.

Pat Gelsinger, CEO of VMware, says, "The new Virtustream business will feature the industry’s broadest portfolio of hybrid cloud offerings, enabling customers to move all their applications to cloud-based IT environments and seamlessly manage their on-premises and off-premises environments. We see tremendous growth opportunities for VMware and EMC with the new Virtustream business, building on the strong momentum of vCloud Air.”

Both Dell and EMC recognize the potential of the hybrid cloud market. The hybrid cloud is a combination of on-premises infrastructure, and cloud infrastructure and software as well. Virtustream utilizes the technologies of EMC Information Infrastructure, VCE, Virtustream and VMware. It focuses on providing enterprise-related cloud-based services, providing complete managed services for on-premises infrastructure, its IaaS platform, including VMware vCloud Air, VCE Cloud Managed Services, and EMC’s Storage Managed Services and Object Storage Services offerings.

EMC CEO, Joe Tucci, says, "Through Virtustream, we are addressing the changes in buying patterns and IT cloud operation models that we are 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.”

Blue chip companies are starting to realize the importance of cloud offerings to the industry. The IT industry is inevitably heading towards the hybrid cloud, where services are offered without any physical on-premise datacenter. Although EMC and VMware, at their core, are datacenter companies, the growing influence of cloud technologies, such as Amazon’s AWS and all of the services it offers, has paved way to stay relevant in this ever-changing market.

Other companies, such as IBM, are also following suite. IBM has built a strategy focused on large companies struggling to make the move to the cloud. IBM offers cloud consulting, as well as SoftLayer for infrastructure, Bluemix for developers, and a portfolio of SaaS services. HP, Cisco, Oracle are all trying a similar approach to the cloud as well.