Joe Tucci, former CEO of EMC
Photograph by David Paul Morris — Bloomberg via Getty Images

Cloud consolidation continues as storage kingpin EMC buys enterprise cloud player Virtustream.

By Barb Darrow
May 26, 2015

Joe Tucci is at it again. The longtime EMC chief executive and chairman has made another purchase, buying Virtustream, an enterprise-oriented cloud computing company, for $1.2 billion in cash.

This move follows EMC’s EMC late 2014 acquisition of Cloudscaling and its OpenStack-based private cloud expertise.

Virtustream is focused on big corporate customers—SAP SAP is among its investors—and fields data centers in the U.S., the U.K. and the Netherlands. It particularly suits financial customers and others who require payment card industry (PCI) compliance, as well as federal government customers, according to Gartner’s IT latest cloud computing report.

Domino Sugar, Coca-Cola, Heinz, and Lexmark are some of Virtustream’s corporate customers.

Virtustream CEO and Co-founder Rodney Rogers will report directly to Tucci.

This move strengthens EMC’s hybrid story, said MSV Janakiram, a cloud computing consultant and founder of Janakiram & Associates. “With Cloudscaling, EMC got an entry into the OpenStack private cloud market and with Virtustream, EMC will instantly gain access to the global footprint of data centers set up by Virtustream.”

He added it will be “interesting to see how EMC will bring Cloudscaling together with Virtustream’s xStream Cloud Management Platform (CMP) to offer an integrated technology stack to customers.”

This deal shows that the cloud consolidation that started two years ago is still going strong. It began when IBM IBM bought SoftLayer for $2 billion and continued through HP’s HPQ acquisition of Eucalyptus; Cisco’s CSCO purchase of Metacloud; and Datapipe’s buy of GoGrid.

All of these buyers are legacy information IT providers that are contending with Amazon AMZN Web Services’ aggressive push into the enterprise market. Their hope is that they can acquire expertise, cloud computing resources, and customers with these deals.

Meanwhile, Amazon, Microsoft MSFT and Google GOOG are the three biggest public cloud providers, and are all focusing more on the sorts of enterprise accounts that EMC, IBM et al have long claimed as their own.

So one big question is: Who’s next on the block? DigitalOcean, ProfitBricks and CloudSigma remain independent cloud infrastructure-as-a-service companies that could be ripe targets going forward.

 

This story will be updated with details from a conference call.

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