VMware and EMC Joins For Cloud Business

EMC and VMware have formed a new business unit that will sell cloud services from EMC, VMware, and Virtustream, the cloud services provider that EMC acquired in May for $1.2 billion.

The new cloud services business will operate under the Virtustream brand, and be jointly owned 50:50 by VMware and EMC. Virtustream’s financial results will be consolidated into VMware’s financial statements starting Q1 2016.

EMC, which owns most of VMware, is in the process of being acquired by Dell the biggest tech acquisition in history. The companies announced the $67 billion deal earlier this month.

Under the direction of CEO Rodney Rogers, Virtustream is expected to generate “multiple hundreds of millions of dollars in recurring revenue in 2016” with a focus on enterprise cloud services.

According to Tuesday’s announcement, VMware will establish a Cloud Provider Software business unit that includes existing VMware cloud management offerings and Virtustream’s software assets, including the xStream cloud management platform.

The joint company will offer a range of managed services for on-premise infrastructure and IaaS.

“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,” said Joe Tucci, EMC Corporation Chairman and CEO.

The new business will offer VMware vCloud Air, VCE Cloud Managed Services, Virtustream’s IaaS, and EMC’s storage managed services and object storage services.