EMC is purchasing the privately held Virtustream software provider for approximately $1.2 billion (£800m) to expand its portfolio of cloud management tools.
Storage systems provider EMC will use Virtustream technology to aid customers moving to cloud-based services as an alternative to running data centres in-house. Virtustream's software can be used to manage complex enterprise applications, such as SAP's S/4HANA, so they can be run effectively on hosted infrastructure services.
Based in Bethesda, Maryland, Virtustream will be the basis of a new business unit at EMC. Rodney Rogers, the CEO of Virtustream, will lead the new business cloud services unit and report to EMC CEO Joe Tucci.
Virtustream's software, called xStream, provides a platform for companies to set up multitenant and private infrastructure cloud deployments with full service level agreements (SLAs) designed to ensure quality of service. Large companies such as Coca-Cola, food processor Heinz, oil company Hess, and motorcycle company Kawasaki have used the technology.
EMC already has a hand in the virtualisation and cloud services market, as the majority owner of virtualisation software provider VMware. The Virtustream xStream has been used to improve the performance and reliability of VMware's core virtualisation technology.
EMC plans to incorporate xStream into its own Federation Enterprise Hybrid Cloud Solution, a package that provides a way for organisations to build hybrid clouds in which some of the workloads run in-house and other workloads run on public clouds, all managed by the same set of software. The xStream software will allow customers to run all of their applications in the cloud, EMC said.
Virtustream also offers security and modeling and planning software. EMC expects to complete the transaction by September.