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Partner Opportunity Emerges in EMCs $1.2 Billion Virtustream Buy

**Editor’s Note: Please click here for a recap of the biggest channel-impacting mergers in Q1 2015.**

By Edward Gately

EMC on Tuesday announced it is acquiring Virtustream, a privately held provider of enterprise-class cloud software and services, to form its new managed cloud-services business.

The acquisition is part of EMC’s strategy to help customers move all of their applications to cloud-based IT environments. Virtustream’s cloud software and IaaS portfolio will be delivered directly to customers and through EMC’s global partners.

EMC Federation service-provider partners will get access to Virtustream’s xStream cloud-management software platform, and can adopt and deliver their own branded services based on it.

Howard Elias, EMC’s president and COO of Global Enterprise Services, said Virtustream’s business model is “very, very partner oriented” with the licensing and enablement of IaaS software.

“We will not just continue that, we will expand that,” he said. “It is our intent to work with the extensive partner ecosystem we have here at the Federation, making all of that IP available: the software licensing, the services IP, the services methodology and best practices, the enablement capability, and … joint go-to-market and enablement … not just on the technology, but at the field sales and marketing level.”

Rodney Rogers, Virtustream’s chairman and CEO, said all of his company’s software revenue has been directed toward the service-provider and systems-integrator channels.

“The big part of our decision here was how EMC approached the service-provider and systems-integration community (as) they are a very important …

… aspect of our customer base,” he said. “We wanted to preserve that focus and that desire to service that customer segment.”

The all-cash, $1.2 billion acquisition is expected to be completed in the third quarter. It was approved by both companies’ boards of directors and necessary Virtustream stockholders. When completed, Virtustream will operate as a separate EMC Federation business.

“With Virtustream in place, EMC will be uniquely positioned as a single source for our customers’ entire hybrid cloud infrastructure and services needs,” said Joe Tucci, EMC’s chairman and CEO.

EMC currently provides the Federation Enterprise Hybrid Cloud Solution, an on-premises, private-cloud offering that provides onramps to public-cloud services such as VMware vCloud Air. With the addition of Virtustream, EMC will enable customers to move their entire application portfolio into a cloud environment.

Virtustream helps enterprises globally to migrate, run and manage applications in the cloud, including SAP. High-profile customers include Coca-Cola, Domino Sugar, Heinz, Hess Corp., Kawasaki, Lexmark and Scotts Miracle-Gro.

“We’re proud to be joining the EMC Federation where our combined capabilities, products and services will allow us to accelerate our vision of delivering the platform of record for enterprise systems, and address the complete breadth of cloud computing needs,” Rogers said.


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