EMC expands cloud push with $1.2 billion buy of Virtustream
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.
This story will be updated with details from a conference call.