EMC, VMware form cloud unit built on Virtustream

EMC and VMware answer the cloud call and put a joint venture in the hands of Virtustream, a private cloud specialist acquired by EMC.

EMC and VMware on Tuesday moved to solidify its cloud plans by forming a new unit that will combine units from EMC, VMware and newly acquired Virtustream.

The effort, dubbed the Cloud Services Business, is a 50-50 venture between EMC and VMware. EMC, parent of VMware, is being acquired by Dell.

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The cloud joint venture will operate under the Virtustream brand and be run by Virtustream CEO Rodney Rogers.

Rogers said Virtustream will "become one of the top 5 service providers globally." EMC bought Virtustream in May as a cloud building block.

As a result, Virtustream's financials will be consolidated into VMware's in the first quarter.

In the big picture, the Cloud Services Business, will round out a hybrid cloud portfolio and give VMware a better story. VMware is either the first cloud company or the last enterprise software company built on the licensing model.

By combining EMC's Virtustream unit with its cloud management tools, VMware answers critics who contend the company lacks an answer to the as-a-service movement.

Virtustream is expected to deliver "multiple hundreds of millions of dollars in recurring revenue in 2016" to VMware and give it an infrastructure as a service play.

On the hybrid front, the Cloud Services Business will include components of EMC's Information Infrastructure unit, VCE and managed storage services.

In addition, VMware will create a cloud provider software unit focused on using the company's software to build hybrid clouds.

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