EMC, VMware Plan to Merge Data Analytics and Cloud Application Assets

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EMC and subsidiary VMware plan to merge their data analytics and cloud application assets into a new group by the second quarter of 2013.

The group, called the Pivotal Initiative, was announced on EMC’s website, according to an article by Reuters. Specific operational structure and further details on the group will be released when it launches in 2013.

Paul Maritz, EMC’s chief strategy officer, will head the group, but Reuters said that an EMC spokeswoman declined to comment further on the plans.

This new combination involves EMC’s Green Plum division and its Pivotal Labs group, which will merge with VMware’s vFabric, SpringSource and Gemstone units, as well as VMware’s data analytics company Cetas and CloudFoundry.

The move will affect about 600 VMware employees and 800 EMC employees.

“This is a very good move,” said Kaushik Roy, a longtime EMC watcher who is a principal with Hercules Technology Growth Capital. “Both companies have applications that are overlapping,” he added. “If things go well they may spin it off.”

Alkesh Shah, tech analyst at Buckingham Research Group, said the companies could decide on a partial spinoff of the unit in 2014/2015.

“This realignment should enable EMC to position itself more as a Cloud enabler while VMware can concentrate on its expanded strategy of the software-defined datacenter,” Shah said in the Reuters article.

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