Wheelings & Dealings: EMC to Acquire Virtustream for $1.2 Billion

Cloud computing and storage giant EMC has announced its intent to scoop up managed cloud infrastructure company Virtustream in a $1.2 billion deal. The acquisition marks a major milestone for EMC as the company moves farther into the cloud computing realm. Virtustream will make up a new managed cloud services business for EMC, and the company will focus on helping its customer migrate applications to cloud-based environments.

EMC is striving to offer a hybrid cloud portfolio that can support all applications, workloads and cloud models. The purchase of privately held Virtustream helps achieve that goal and the company brings with it a vast suite of IaaS and cloud software solutions as well as a giant portfolio of customers. Virtustream counts the Coca-Cola Company, Domino Sugar, Heinz, Hess Corporation, Kawasaki, Lexmark and Scotts Miracle-Gro among its clients.

Virtustream also boasts a huge network of service provider partners located throughout the world who are using the company’s infrastructure to power their managed cloud offerings. The acquisition means that EMC Federation service provider partners will be able to use the Virtustream cloud management software platform to offer their own branded services.

"Virtustream is an exceptional company and this is a critical and transformative acquisition for EMC in one of the industry's fastest-growing and most important sectors," said Joe Tucci, chairman and CEO of EMC. "With Virtustream in place, EMC will be uniquely positioned as a single source for our customers' entire hybrid cloud infrastructure and services needs.”

EMC will incorporate Virtustream managed cloud software and services infrastructure into its Federation Enterprise Hybrid Cloud Solution. This enables customers to access an easy on-ramp to public cloud services for smooth migration of applications into a cloud environment. Virtustream also offers application lifecycle automation and orchestration and the company’s xStream platform is tightly integrated with VMware vSphere.

The all-cash acquisition is expected to close in the third quarter of the year and has already been approved by Virtustream stockholders and the boards of directors at both companies.