EMC acquires Virtustream for $1.2 billion to bolster hybrid cloud services

EMC said it will use Virtustream's portfolio as part of its new managed cloud services business.

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EMC CEO Joe Tucci

EMC has announced plans to acquire cloud software and services provider Virtustream in an all-cash deal valued around $1.2 billion.

EMC said it will merge Virtustream's portfolio into its Federation Enterprise Hybrid Cloud offering, creating a new managed cloud services business that supports all applications, all workloads and all cloud models.

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The Massachusetts-based storage giant calls the acquisition a "transformational element" of its hybrid cloud strategy.

"With Virtustream in place, EMC will be uniquely positioned as a single source for our customers' entire hybrid cloud infrastructure and services needs," EMC CEO Joe Tucci said in a statement. "It's a game changer."

Founded in 2009, Virtustream specializes in lifecycle automation and orchestration with a particular focus on mission-critical enterprise applications such as SAP S/4HANA (SAP is also a Virtustream investor). Virtustream's xStream platform is tightly integrated with VMware vSphere, another EMC-controlled property.

Virtustream customers include The Coca-Cola Company, Domino Sugar, Heinz, Hess Corporation, Kawasaki, Lexmark, and Scotts Miracle-Gro.

As part of the deal, Virtustream will continue to operate as a separate EMC Federation business, with CEO and co-founder Rodney Rogers reporting directly to Tucci.

Once the deal is completed in the third quarter, EMC will have filled its stable with four cloud companies, following the purchases of Cloudscaling, Maginatics and Spanning in late 2014.

Each acquisition fit strategically within EMC's hybrid cloud strategy. Cloudscaling delivers OpenStack-based software for hybrid cloud deployments, Maginatics focuses on data mobility across services, and Spanning provides app and data backup tools. Virtustream will help EMC stitch everything together.

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